GREEN SUKUK AS AN EFFORT TO FACE CLIMATE CHANGE IN INDONESIA

Abstract

Climate change that is happening right now cannot be avoided by every country, including Indonesia. Indonesia is an archipelagic country with a tropical climate, so it is very vulnerable to the effects of climate change. Indonesia has a fairly high level of vulnerability to the impacts of climate change. This vulnerability can be seen from the increase in Indonesia's Global Climate Risk Index (CRI) ranking over the last two decades. In 2018, Indonesia began issuing a sharia financial instrument in the form of bonds that combined the sharia system and targeted companies that were implementing environmental principles. Green sukuk is here in Indonesia as a solution to address the problems of climate change in Indonesia. Green sukuk is a sharia green investment that has new innovations to support efforts to preserve the environment and achieve sustainable development in Indonesia. This study aims to analyze the potential of green sukuk in Indonesia in dealing with climate change. The research method used is a literature study. The results of the analysis in this study indicate that green sukuk have the potential to be developed in Indonesia. Green sukuk have a major role in realizing sustainable development and are able to realize projects that have resilience to climate change which is proven in the development of green projects for drought management and flood mitigation.