ESG SHARIAH REPORT
A Bridge Between Global Responsibility and Islamic Ethics
ESG Shariah is a dual-standard framework, integrating global sustainable development standards with ethical values, enabling businesses to access Islamic markets without compromising their core beliefs.
Why ESG Shariah
Is an Inevitable Trend for Modern Businesses
Alignment with international market standards
Applying international ESG standards alongside Islamic ethical principles, meeting the expectations of global investors and business partners.
Expanded access to ESG and Islamic financing opportunities
Businesses may access specialized funding sources such as Shariah-compliant investment funds, Sukuk issuance, and green finance mechanisms in markets including Malaysia, the UAE, and Indonesia.
Enhanced trust and credibility with ethical investors
Transparent disclosure under the ESG Shariah framework strengthens credibility, accountability, and ethical corporate positioning.
Strengthened governance and risk control
Comprehensive review under both ESG and Shariah principles enables early risk identification and supports resilient, adaptive operations.
Access to Islamic markets
Balancing sustainable development objectives with local cultural values creates competitive advantages when expanding into high-growth Islamic markets.
ESG Shariah – Dual Standards for Sustainable and Ethical Development
The integration of ESG principles and Islamic ethical standards enables businesses to expand access to capital, strengthen governance, and enhance credibility in the global ethical market.
ESG Shariah is an integrated assessment framework that combines the three pillars of sustainable development (Environmental, Social, and Governance) with Islamic financial and ethical standards (Shariah compliance).
Beyond measuring environmental, social, and governance performance, ESG Shariah ensures ethical conduct, transparency, and fairness across the entire business value chain.
ESG Shariah = Global ESG standards + Islamic standards
KEY DIFFERENCES BETWEEN ESG SHARIAH AND ESG
| Comparison criteria | ESG | ESG SHARIAH |
| Orientation basis | Based on international principles on Environmental, Social, and Corporate Governance | Combines global ESG standards with Islamic ethical and financial standards |
| Core objectives | Enhance environmental, social, and governance performance and improve transparency | Ensure sustainability and compliance with Islamic ethical principles across all operational activities |
| Scope of application | Widely applied globally and applicable to businesses across all sectors | Suitable for businesses targeting Islamic markets or Shariah-compliant ethical funds |
| Excluded activities | No sector-specific exclusions, provided ESG criteria are met | Excludes activities inconsistent with Islamic ethical principles, including interest-based finance, alcohol, gambling, and prohibited practices |
| Assessment mechanism | Based on financial and non-financial data, with a primary focus on quantitative indicators | Combines ESG assessment with Shariah screening to exclude non-ethical activities |
| Accessible funding | ESG funds, green finance, and investors focused on sustainable development | Expanded to Shariah-compliant funds, ethical investors, Islamic banks, and US/UK markets |
| Value delivered | Enhances brand reputation, improves fundraising capacity, and strengthens credit ratings | Builds trust within the Islamic community while increasing capabilities for sustainable international integration |
ESG Shariah positions businesses along two parallel dimensions: sustainable development in line with international standards and adherence to ethical identity within Islamic business environments.
Businesses Applying ESG Shariah
Not limited to Islamic businesses – ESG Shariah is a strategic standard that helps expand markets, enhance credibility, and attract global capital.
Practical Value of Implementing ESG Shariah
Standardized Transparent Governance
Establish decision-making mechanisms based on data and ethical principles, ensuring fairness and accountability at all management levels.
Systemic Risk Control
The ESG Shariah framework enables transparent operations, minimizes deviations, and mitigates legal and financial risks.
Strengthened Compliance Culture
Foster a work environment grounded in trust and professional ethics, motivating commitment and organizational alignment.
Integration of Sustainable Strategies
Compatible with ISO, GRI, and TCFD standards – optimizing resources, shortening implementation time, and enhancing the company’s international credibility.
Standardized ESG Shariah Implementation Roadmap by ARES Vietnam
From assessing the current status to transparent disclosure – ensuring compliance with Islamic standards and effective integration into business operations
Current Status Assessment
Analyze existing ESG compliance, review data and financial systems according to Shariah principles.
Strategic Advisory
Define ESG Shariah objectives and develop internal policies tailored to industry specifics, markets, and investor requirements.
Establishing the Measurement System
Design key performance indicators aligned with GRI, TCFD, SASB… integrating Islamic principles, standardizing processes, and controlling ESG data.
Report Preparation & Disclosure
Compile reports in accordance with international standards and Shariah ethics; support disclosure to partners, investors, or relevant exchanges.
Training the Team
Train responsible personnel on ESG Shariah principles, ensuring correct understanding and proper implementation across the organization.
System Maintenance
Establish processes for periodic updates, reporting, and improvements to keep the ESG Shariah system aligned with corporate development objectives.
Register for ESG Shariah Implementation Consultation
with ARES Vietnam
Please leave your information – the expert team at ARES Vietnam will:
- Assess readiness and alignment with ESG Shariah
- Develop a tailored implementation roadmap aligned with industry characteristics and operational requirements.
- Provide strategic advisory on fundraising, report preparation, and transparent disclosure
*Service incentives applicable to organisations registering via the Website
Frequently Asked Questions about ESG Shariah
-
Can non-Islamic businesses implement ESG Shariah?
It is entirely possible. ESG Shariah is applicable to any business seeking to expand cooperation with ethical investors, Shariah-compliant funds, or Islamic markets such as Malaysia, the UAE, and Indonesia.
-
Is compliance with Halal standards mandatory under ESG Shariah?
Not mandatory. However, ESG Shariah is closely aligned with Halal principles in business practices, helping organizations enhance credibility and improve certification readiness within Islamic communities.
-
How is Shariah compliance assessed?
Through specific indicators such as the proportion of revenue derived from Shariah-compliant activities, financial structures free from riba (interest), and transparent processes that avoid unethical practices. These indicators should be guided and validated by experts with combined ESG and Shariah expertise.
-
What should manufacturing companies consider when applying ESG Shariah?
Manufacturers should review their entire supply chain—including raw materials, production processes, and business partners—to ensure Shariah compliance. At the same time, ESG indicators such as clean energy use, worker protection, and transparent disclosure should be integrated.
-
How long does ESG Shariah implementation take?
The timeline depends on data readiness and organizational scale. On average, implementation takes 3–6 months for companies with established management systems, and longer for those starting from scratch. ARES Vietnam provides a tailored roadmap based on each organization’s conditions.
-
Is ESG Shariah implementation costly?
Costs are flexible and depend on the scope and level of implementation. ARES Vietnam offers modular and end-to-end service packages, optimizing costs in line with organizational capacity and strategic objectives.
