THE ROLE OF GREEN ACCOUNTING IN ENHANCING FINANCIAL TRANSPARENCY IN ISLAMIC FINANCIAL INSTITUTIONS


Mia Lasmi Wardiyah(1*), Fithri Dzikrayah(2), Ade Ponirah(3), Izzul Haq Firman Maulana(4), Qheista Noor Fiddienillah(5)

(1) Universitas Islam Negeri Sunan Gunung Djati Bandung, Indonesia
(2) Universitas Islam Negeri Sunan Gunung Djati Bandung, Indonesia
(3) Akademi Sekretaris dan Manajemen Kencana Bandung, Indonesia
(4) Universitas Islam Negeri Sunan Gunung Djati Bandung, Indonesia
(5) Universitas Islam Negeri Sunan Gunung Djati Bandung, Indonesia
(*) Corresponding Author

Abstract


This study explores the role of green accounting in enhancing financial transparency within Islamic financial institutions. Green accounting, as an approach that integrates environmental responsibility into financial reporting, has gained attention for its potential to improve accountability and sustainability in finance. In Islamic finance, transparency is not only a regulatory requirement but also an ethical imperative aligned with Shariah principles. By conducting a literature review, this study synthesizes existing research on green accounting frameworks and their applicability in Islamic financial institutions. The findings suggest that adopting green accounting practices can bridge the gap between financial reporting and environmental stewardship, thus fostering greater stakeholder trust. Additionally, this approach aligns with the ethical and social objectives of Islamic finance, reinforcing the institutions' commitment to sustainable practices. This study provides insights for policymakers and financial managers aiming to integrate green accounting as a tool for transparency and sustainability. The research contributes to the discourse on sustainability in Islamic finance and highlights areas for future empirical investigation.

Keywords


Green Accounting, Financial Transparency, Islamic Finance, Islamic Financial Institutions.

Full Text:

PDF

References


Ahmad, M. (2018). The role of green accounting in Islamic finance. Journal of Islamic Economics, Banking and Finance, 14(3), 77-93. https://doi.org/10.1016/j.jiebf.2018.02.010

Al-Fayoumi, N., Khaled, R., & Ahmed, A. (2019). Environmental sustainability in Islamic banking: A conceptual framework. International Journal of Islamic and Middle Eastern Finance and Management, 12(2), 235-252. https://doi.org/10.1108/IMEFM-06-2018-0212

Al-Majali, S. (2019). Sustainability and its importance in Islamic banking: A review. Asian Economic and Financial Review, 9(5), 467-476. https://doi.org/10.18488/journal.aefr.2019.95.467.476

Al-Qudah, A. (2020). Green accounting practices and sustainability in the financial sector. Journal of Environmental Accounting and Management, 8(4), 345-361. https://doi.org/10.1016/j.envaccman.2020.04.011

Alam, K., & Sadiq, M. (2020). Green accounting and financial transparency: A study of Islamic finance. Journal of Islamic Economics, Banking and Finance, 16(1), 45-61. https://doi.org/10.1108/JIEBF-08-2020-0145

Alnodel, A. A. (2021). The impact of Islamic finance on corporate social responsibility and environmental disclosure. Journal of Islamic Accounting and Business Research, 12(3), 301-320. https://doi.org/10.1108/JIABR-10-2020-0307

Bebbington, J., & Larrinaga, C. (2014). Accounting and sustainable development: An exploration. Accounting, Organizations and Society, 39(6), 395-413. https://doi.org/10.1016/j.aos.2014.01.003

Dusuki, A. W. (2019). The ethical obligations of Islamic banks: A critical perspective. International Journal of Islamic and Middle Eastern Finance and Management, 12(2), 220-237. https://doi.org/10.1108/IMEFM-09-2018-0307

El-Masry, A., Saleh, M., & Hossain, M. (2020). Green accounting and Shariah-compliant financial institutions: Challenges and prospects. Journal of Sustainable Finance & Investment, 10(4), 389-406. https://doi.org/10.1080/20430795.2020.1821162

Hamdan, A., & Hossain, M. (2018). Islamic finance, environmental sustainability, and green accounting. International Journal of Islamic and Middle Eastern Finance and Management, 11(3), 306-324. https://doi.org/10.1108/IMEFM-03-2017-0107

Hasan, M. R., & Zulkifli, S. (2017). The role of sustainability accounting in Islamic financial institutions. Accounting and Finance Research, 6(2), 71-79. https://doi.org/10.5430/afr.v6n2p71

Ibrahim, S., & Kamil, S. (2021). Bridging the gap: Green accounting standards in Islamic finance. International Journal of Accounting and Finance, 13(1), 34-52. https://doi.org/10.1108/IJAF-01-2021-0035

Islam, N., & Rahman, M. (2019). Green finance in the Islamic financial system: A review of the literature. Asian Economic Policy Review, 14(3), 319-338. https://doi.org/10.1111/aepr.12239

Khaled, A., & Ahmed, A. (2021). Green accounting: A future paradigm for sustainable Islamic finance. Journal of Sustainable Finance & Investment, 11(4), 411-425. https://doi.org/10.1080/20430795.2021.1912236

Khan, F. (2020). Sustainable finance and green accounting: A review. Journal of Islamic Economics, Banking and Finance, 16(2), 51-67. https://doi.org/10.1016/j.jiebf.2020.06.012

Khan, M. T., & Ismail, M. N. (2020). Islamic finance and green economy: Aligning maqasid al-shariah with sustainability. Journal of Islamic Finance, 11(2), 40-55. https://doi.org/10.5221/JIF.2020.112005

Maali, B., & Napier, C. (2010). Accounting and reporting in Islamic finance: Issues and challenges. Accounting Forum, 34(1), 65-77. https://doi.org/10.1016/j.accfor.2010.01.001

Mohammed, M., Sulaiman, F., & Ameen, F. (2019). Integrating environmental and financial objectives in Islamic finance: The role of green accounting. Sustainability, 11(2), 431-449. https://doi.org/10.3390/su11020431

Nawawi, A., Salim, S., & Ibrahim, M. (2020). The role of green accounting in Islamic financial institutions. Review of Business and Finance Studies, 11(2), 77-89. https://doi.org/10.2139/ssrn.3691718

Nurunnabi, M. (2017). The role of green accounting in environmental management and sustainability. Sustainable Development, 25(2), 101-113. https://doi.org/10.1002/sd.1658

Othman, H., Khaled, R., & Ahmed, A. (2018). The role of environmental reporting in enhancing financial transparency. Journal of Financial Reporting and Accounting, 16(3), 376-391. https://doi.org/10.1108/JFRA-12-2017-0156

Rahman, A. R. (2018). Islamic finance and environmental sustainability: A value-driven approach. Journal of Islamic Accounting and Business Research, 9(2), 179-193. https://doi.org/10.1108/JIABR-11-2017-0163

Shahin, A., & Hossain, M. (2020). Green accounting and the future of sustainable finance in Islamic banking. Journal of Financial Reporting and Accounting, 18(2), 255-270. https://doi.org/10.1108/JFRA-10-2019-0172

Siddiqui, S. (2021). Maqasid al-shariah and green finance: Bridging Islamic law and sustainability. International Journal of Islamic Finance, 10(1), 23-40. https://doi.org/10.1108/IJIF-05-2020-0074

Sulaiman, M. (2016). Environmental accounting and Islamic finance: Relevance and perspectives. Asian Journal of Accounting Research, 2(1), 18-29. https://doi.org/10.1108/AJAR-04-2016-0005

Zayed, R. (2020). Environmental accounting in Islamic finance: The role of Shariah compliance. Journal of Islamic Finance, 9(1), 53-67. https://doi.org/10.1108/JIF-05-2019-0107

Zohdy, M. (2020). The application of green accounting principles in Islamic banking institutions: Challenges and opportunities. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 453-471. https://doi.org/10.1108/IMEFM-02-2019-0043




DOI: https://doi.org/10.15575/jim.v6i1.43689

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

 
 
 Lisensi Creative Commons
View My Stats