DETERMINANTS OF GREEN SUKUK INVESTMENT IN INDONESIA
Abstract
The Green Sukuk program has facilitated money flows for sustainable future development. Green Sukuk represents a successful national collaborative initiative aimed at combating climate change. Since the sukuk offering period, conditions have demonstrated heightened demand, reflecting significant investor interest in the Green Sukuk market. This article aims to examine the significance of environmental incentive in investing decisions within the Indonesian Green Sukuk market. A literature analysis revealed that while investors in the Green Sukuk market regard the attributes of Green Sukuk as significant, they do not disregard profit considerations.
References
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Ajzen I (1991) The theory of planned behavior. Organ Behav Hum Decis Process 50(2):179–211. (PMID: 10.1016/0749-5978(91)90020-T)
Aren S, Zengin AN (2016) Influence of financial literacy and risk perception on choice of investment. Procedia Soc Behav Sci 235:656–663. (PMID: https://doi.org/10.1016/j.sbspro.2016.11.047
Akhtar F, Das N (2018) Predictors of investment intention in Indian stock markets: extending the theory of planned behaviour. Int J Bank Mark 37(1):97–119. (PMID: https://doi.org/10.1108/IJBM-08-2017-0167
Azmat, Saad, Skully, Michael, & Brown, Kym. (2014). The Shariah compliance challenge in Islamic bond markets. Pacific-Basin Finance Journal, 28, 47-57. https://doi.org/10.1016/j.pacfin.2013.11.003
Azhgaliyeva, Dina. 2020. Green Islamic Bonds. Asian Development Outlook 2021
Cheung, S.F., Chan, D.K.-S., Wong, Z.S.-Y., 1999. Reexamining the theory of planned behavior in understanding wastepaper recycling. Environ. Behav. 31 (5), 587–612. http://dx.doi.org/10.1177/00139169921972254
Choi D, Kim KJ (2019) Influences of environmental and hedonic motivations on intention to purchase green products: an extension of the theory of planned behavior. Sustain Prod Consum 18:145–155. (PMID: https://doi.org/10.1016/j.spc.2019.02.001
Castillejos-Petalcorin, C., Park, D., Puongsophol, K., Tian, S., & Yamadera, S. (2020). Green Local Currency Bonds and Infrastructure Finance in ASEAN+3. In B. Susantono, D. Park, & S. Tian (Eds.), Infrastructure Financing in Asia. Asian Development Bank. https://doi.org/https://doi.org/10.1142/9789811215124_0008
DuPont Carolyn M., Levitt.J.N., Bilmes.L.J. 2015. Green Bonds and Land Conservation: The Evolution of a New Financing Tool. Working paper series. Harvard University. https://research.hks.harvard.edu/publications/workingpapers/Index.aspx,diakses 7 Oktober 2016
El-Halaby, Sherif and Hussainey, Khaled. Perceptions Of Stakeholders And Non-Customers Towards Accountabilities Practices Of Islamic Banks: Evidence From Multiple Contexts. MSA-Management science journal. Volume: 2, Issue: 2, Year: 2023, pp.1-38 https://doi.org/10.21608/msamsj.2023.183998.1004
El Qorchi, Mohammed. (2005). Islamic finance gears up. Finance and Development, 42(4), 46.
Fielding, K.S., McDonald, R., Louis, W.R., 2008. Theory of planned behaviour, identity and intentions to engage in environmental activism. J. Environ. Psychol. 28 (4), 318–326. http://dx.doi.org/10.1016/j.jenvp.2008.03.003 .
Fender, I. and V. S. (2019). Green bonds: the reserve management perspective. BIS Quaterly Review, September 2019, 49–63. https://www.bis.org/publ/qtrpdf/r_qt1909f.pdf
Glavas. Dejan. 2020. Green regulation and stock price reaction to green bond issuance. In Finance Volume 41, Issue 1, 2020, pages 7 to 51 https://doi.org/10.3917/fina.411.0007
Gait, W. (2008), “An empirical survey of individual customer, business firms and financial institution attitudes towards islamic methods of finance”, International Journal of Social Economics, Vol. 35 No. 11, pp. 783-808
Hadad Ismid, 2020, PEMBANGUNAN EKONOMI VERSUS LINGKUNGAN: SIAPA YANG MESTI MENANG?. Diakses https://madaniberkelanjutan.id/2020/06/28/pembangunan-ekonomi-versus-lingkungan-siapa-yang-mesti-menang#
Hassan, Khalid Abbasher. (2012). Comparison between Sukuk and conventional bonds: Value at risk approach. University of Westminster, September.
Josué Banga (2019) The green bond market: a potential source of climate finance for developing countries, Journal of Sustainable Finance & Investment, 9:1, 17-32, To link to this article: https://doi.org/10.1080/20430795.2018.1498617
Kaiser, F.G., Gutscher, H., 2003. The proposition of a general version of the theory of planned behavior: Predicting ecological behavior. J. Appl. Soc. Psychol. 33 (3), 586–603. http://dx.doi.org/10.1111/j.1559-1816.2003.tb01914.x.
Kemenkeu. 2021. Green Sukuk Allocation And Impact Report May 2021. Kementrian Keuangan Indonesia.
Mohamed, Hisham Hanifa, Masih, Mansur, & Bacha, Obiyathulla I. (2015). Why do issuers issue Sukuk or conventional bond? Evidence from Malaysian listed firms using partial adjustment models. Pacific-Basin Finance Journal, 34, 233-252 https://doi.org/10.1016/j.pacfin.2015.02.004 .
Maichum, K., Parichatnon, S., Peng, K.-C., 2016. Application of the extended theory of planned behavior model to investigate purchase intention of green products among Thai consumers. Sustainability (10), 1077 https://doi.org/10.3390/su8101077
Moghul.,U.E and Safar Aly. S.H.K.2014. Green Sukuk The Introduction Of Islam’s environment ethics to contenporry Islamic Finance. GEO.,Intl https://ssrn.com/abstract=2580864
Nuhbatul Basyariah, H. Kusuma, Ibnu Qizam . 2021. Determinants of Sukuk Market Development: Macroeconomic Stability and Institutional Approach. Journal of Asian Finance, Economics and Business Vol. 8 . No. 2 https://doi.org/10.13106/jafeb.2021.vol8.no2.0201 .
Tolliver. Clarence, Alexander Ryota Keeley, Shunsuke Managi,2020. Drivers of green bond market growth: The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability, Journal of Cleaner Production, Volume 244,2020, 118643, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2019.118643 .
Pauline Deschryver, and de Mariz, Frederic, 2020. What Future for the Green Bond Market? How Can Policymakers, Companies, and Investors Unlock the Potential of the Green Bond Market? (March 24, 2020). Journal of Risk and Financial Management, 2020, 13, 61; Doi:10.3390/jrfm13030061, Available at SSRN: https://ssrn.com/abstract=3565933
Karina, Luthfia Ayu. 2019. Peluang dan tantangan perkembangan green sukuk di Indonesia. Conference on Islamic Management, Accounting, and Economics (CIMAE) Proceeding. Vol. 2, 2019, 259-265.
Qi X, Ploeger A (2019) Explaining consumers' intentions towards purchasing green food in Qingdao, China: the amendment and extension of the theory of planned behavior. Appetite 133:414–422. (PMID: https://doi.org/10.1016/j.appet.2018.12.004
Reichelt, H., & Keenan, C. (2017). The Green Bond Market: 10 years later and looking ahead. http://pubdocs.worldbank.org/en/554231525378003380/publicationpensionfundservicegreenbonds201712- rev.p
Sri Rahayu Hijrah HATI, Elevita Y, Muhammad Budi Prasetyo, Tengku Ezni Balqiah And Arga Hanantosri. 2019. Green Sukuk Potential in Attracting Global and Domestic Investor to Support Sustainable Development. 34th IBIMA Conference: 13-14 November 2019, Madrid, Spain. ISBN: 978-0-9998551-3-3
Suherman dan Manzilati A. 2017. Identifikasi Potensi Penerbitan Green Sukuk Di Indonesia. Jurnal Ilmiah Mahasiswa FEB UB. Vol 5 . No. 1 https://jimfeb.ub.ac.id/index.php/jimfeb/article/view/3561
Su, Meiling.2014. Can green Bonds Help Air Pollution Mitigation in China? Potential and Challenges.Thesis diterbitkan. Sweden: IIIEE, Lund University https://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=7861078&fileOId=7861122
Said, Ali and Rihab Grassa. 2013. The Determinants of Sukuk Market Development: Does Macroeconomic Factors Influence the Construction of Certain Structure of Sukuk? Journal of Applied
Finance & Banking, vol. 3, no. 5, 2013, 251-267 https://doi.org/10.13106/jafeb.2021.vol8.no2.0201
Smaoui, Houcem & Mohsin Khawaja. 2017 The Determinants of Sukuk Market Development, Emerging Markets Finance and Trade, 53:7, 1501-1518, https://doi.org/10.1080/1540496X.2016.1224175
Tao, Jacqueline Yujia.2016. Utilising Green Bonds for Financing Renewable Energy Projects in Developing Asian Countries. ERIA Research Project Report 2014-27, Jakarta: ERIA, pp.343- 381.
Wu, S.-I., Chen, J.-Y., 2014. A model of green consumption behavior constructed by the theory of planned behavior. Int. J. Market. Stud. 6 (5), 119. https://doi.org/10.5539/ijms.v6n5p119
Więckowska, M. (2013). The role bonds in financing climate resilient economy. Copernican Journal of Finance & Accounting, 2(1), 153–167. https://doi.org/10.12775/CJFA.2013.011
Walid, Hegazy. (2005). Fatwas and the fate of Islamic finance: A critique of the practice of fatwa in contemporary Islamic financial markets. Islamic finance: Current legal and regulatory issues, 133-149.
Warsame, M.H., Ireri, E.M., Does the theory of planned Behaviour (TPB) matter in Sukuk investment decisions?. Journal of Behavioral and Experimental Finance (2016), http://dx.doi.org/10.1016/j.jbef.2016.10.002
Alam.,N.,Fethi and Aris.R. 2016. Green Sukuk : An Inovation in Islamic capital Marke. In et al (Andrew Dosman) Ed. Energy and Finance Sustainability in the Energy Industry. Springer. https://doi.org/10.20885/RISFE.vol3.iss2.art6
Anh Tu, Chuc, Tapan Sarker, and Ehsan Rasoulinezhad. 2020. "Factors Influencing the Green Bond Market Expansion: Evidence from a Multi-Dimensional Analysis" Journal of Risk and Financial Management 13, no. 6: 126. https://doi.org/10.3390/jrfm13060126
Ajzen I (1991) The theory of planned behavior. Organ Behav Hum Decis Process 50(2):179–211. (PMID: 10.1016/0749-5978(91)90020-T)
Aren S, Zengin AN (2016) Influence of financial literacy and risk perception on choice of investment. Procedia Soc Behav Sci 235:656–663. (PMID: https://doi.org/10.1016/j.sbspro.2016.11.047
Akhtar F, Das N (2018) Predictors of investment intention in Indian stock markets: extending the theory of planned behaviour. Int J Bank Mark 37(1):97–119. (PMID: https://doi.org/10.1108/IJBM-08-2017-0167
Azmat, Saad, Skully, Michael, & Brown, Kym. (2014). The Shariah compliance challenge in Islamic bond markets. Pacific-Basin Finance Journal, 28, 47-57. https://doi.org/10.1016/j.pacfin.2013.11.003
Azhgaliyeva, Dina. 2020. Green Islamic Bonds. Asian Development Outlook 2021
Cheung, S.F., Chan, D.K.-S., Wong, Z.S.-Y., 1999. Reexamining the theory of planned behavior in understanding wastepaper recycling. Environ. Behav. 31 (5), 587–612. http://dx.doi.org/10.1177/00139169921972254
Choi D, Kim KJ (2019) Influences of environmental and hedonic motivations on intention to purchase green products: an extension of the theory of planned behavior. Sustain Prod Consum 18:145–155. (PMID: https://doi.org/10.1016/j.spc.2019.02.001
Castillejos-Petalcorin, C., Park, D., Puongsophol, K., Tian, S., & Yamadera, S. (2020). Green Local Currency Bonds and Infrastructure Finance in ASEAN+3. In B. Susantono, D. Park, & S. Tian (Eds.), Infrastructure Financing in Asia. Asian Development Bank. https://doi.org/https://doi.org/10.1142/9789811215124_0008
DuPont Carolyn M., Levitt.J.N., Bilmes.L.J. 2015. Green Bonds and Land Conservation: The Evolution of a New Financing Tool. Working paper series. Harvard University. https://research.hks.harvard.edu/publications/workingpapers/Index.aspx,diakses 7 Oktober 2016
El-Halaby, Sherif and Hussainey, Khaled. Perceptions Of Stakeholders And Non-Customers Towards Accountabilities Practices Of Islamic Banks: Evidence From Multiple Contexts. MSA-Management science journal. Volume: 2, Issue: 2, Year: 2023, pp.1-38 https://doi.org/10.21608/msamsj.2023.183998.1004
El Qorchi, Mohammed. (2005). Islamic finance gears up. Finance and Development, 42(4), 46.
Fielding, K.S., McDonald, R., Louis, W.R., 2008. Theory of planned behaviour, identity and intentions to engage in environmental activism. J. Environ. Psychol. 28 (4), 318–326. http://dx.doi.org/10.1016/j.jenvp.2008.03.003 .
Fender, I. and V. S. (2019). Green bonds: the reserve management perspective. BIS Quaterly Review, September 2019, 49–63. https://www.bis.org/publ/qtrpdf/r_qt1909f.pdf
Glavas. Dejan. 2020. Green regulation and stock price reaction to green bond issuance. In Finance Volume 41, Issue 1, 2020, pages 7 to 51 https://doi.org/10.3917/fina.411.0007
Gait, W. (2008), “An empirical survey of individual customer, business firms and financial institution attitudes towards islamic methods of finance”, International Journal of Social Economics, Vol. 35 No. 11, pp. 783-808
Hadad Ismid, 2020, PEMBANGUNAN EKONOMI VERSUS LINGKUNGAN: SIAPA YANG MESTI MENANG?. Diakses https://madaniberkelanjutan.id/2020/06/28/pembangunan-ekonomi-versus-lingkungan-siapa-yang-mesti-menang#
Hassan, Khalid Abbasher. (2012). Comparison between Sukuk and conventional bonds: Value at risk approach. University of Westminster, September.
Josué Banga (2019) The green bond market: a potential source of climate finance for developing countries, Journal of Sustainable Finance & Investment, 9:1, 17-32, To link to this article: https://doi.org/10.1080/20430795.2018.1498617
Kaiser, F.G., Gutscher, H., 2003. The proposition of a general version of the theory of planned behavior: Predicting ecological behavior. J. Appl. Soc. Psychol. 33 (3), 586–603. http://dx.doi.org/10.1111/j.1559-1816.2003.tb01914.x.
Kemenkeu. 2021. Green Sukuk Allocation And Impact Report May 2021. Kementrian Keuangan Indonesia.
Mohamed, Hisham Hanifa, Masih, Mansur, & Bacha, Obiyathulla I. (2015). Why do issuers issue Sukuk or conventional bond? Evidence from Malaysian listed firms using partial adjustment models. Pacific-Basin Finance Journal, 34, 233-252 https://doi.org/10.1016/j.pacfin.2015.02.004 .
Maichum, K., Parichatnon, S., Peng, K.-C., 2016. Application of the extended theory of planned behavior model to investigate purchase intention of green products among Thai consumers. Sustainability (10), 1077 https://doi.org/10.3390/su8101077
Moghul.,U.E and Safar Aly. S.H.K.2014. Green Sukuk The Introduction Of Islam’s environment ethics to contenporry Islamic Finance. GEO.,Intl https://ssrn.com/abstract=2580864
Nuhbatul Basyariah, H. Kusuma, Ibnu Qizam . 2021. Determinants of Sukuk Market Development: Macroeconomic Stability and Institutional Approach. Journal of Asian Finance, Economics and Business Vol. 8 . No. 2 https://doi.org/10.13106/jafeb.2021.vol8.no2.0201 .
Tolliver. Clarence, Alexander Ryota Keeley, Shunsuke Managi,2020. Drivers of green bond market growth: The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability, Journal of Cleaner Production, Volume 244,2020, 118643, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2019.118643 .
Pauline Deschryver, and de Mariz, Frederic, 2020. What Future for the Green Bond Market? How Can Policymakers, Companies, and Investors Unlock the Potential of the Green Bond Market? (March 24, 2020). Journal of Risk and Financial Management, 2020, 13, 61; Doi:10.3390/jrfm13030061, Available at SSRN: https://ssrn.com/abstract=3565933
Karina, Luthfia Ayu. 2019. Peluang dan tantangan perkembangan green sukuk di Indonesia. Conference on Islamic Management, Accounting, and Economics (CIMAE) Proceeding. Vol. 2, 2019, 259-265.
Qi X, Ploeger A (2019) Explaining consumers' intentions towards purchasing green food in Qingdao, China: the amendment and extension of the theory of planned behavior. Appetite 133:414–422. (PMID: https://doi.org/10.1016/j.appet.2018.12.004
Reichelt, H., & Keenan, C. (2017). The Green Bond Market: 10 years later and looking ahead. http://pubdocs.worldbank.org/en/554231525378003380/publicationpensionfundservicegreenbonds201712- rev.p
Sri Rahayu Hijrah HATI, Elevita Y, Muhammad Budi Prasetyo, Tengku Ezni Balqiah And Arga Hanantosri. 2019. Green Sukuk Potential in Attracting Global and Domestic Investor to Support Sustainable Development. 34th IBIMA Conference: 13-14 November 2019, Madrid, Spain. ISBN: 978-0-9998551-3-3
Suherman dan Manzilati A. 2017. Identifikasi Potensi Penerbitan Green Sukuk Di Indonesia. Jurnal Ilmiah Mahasiswa FEB UB. Vol 5 . No. 1 https://jimfeb.ub.ac.id/index.php/jimfeb/article/view/3561
Su, Meiling.2014. Can green Bonds Help Air Pollution Mitigation in China? Potential and Challenges.Thesis diterbitkan. Sweden: IIIEE, Lund University https://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=7861078&fileOId=7861122
Said, Ali and Rihab Grassa. 2013. The Determinants of Sukuk Market Development: Does Macroeconomic Factors Influence the Construction of Certain Structure of Sukuk? Journal of Applied
Finance & Banking, vol. 3, no. 5, 2013, 251-267 https://doi.org/10.13106/jafeb.2021.vol8.no2.0201
Smaoui, Houcem & Mohsin Khawaja. 2017 The Determinants of Sukuk Market Development, Emerging Markets Finance and Trade, 53:7, 1501-1518, https://doi.org/10.1080/1540496X.2016.1224175
Tao, Jacqueline Yujia.2016. Utilising Green Bonds for Financing Renewable Energy Projects in Developing Asian Countries. ERIA Research Project Report 2014-27, Jakarta: ERIA, pp.343- 381.
Wu, S.-I., Chen, J.-Y., 2014. A model of green consumption behavior constructed by the theory of planned behavior. Int. J. Market. Stud. 6 (5), 119. https://doi.org/10.5539/ijms.v6n5p119
Więckowska, M. (2013). The role bonds in financing climate resilient economy. Copernican Journal of Finance & Accounting, 2(1), 153–167. https://doi.org/10.12775/CJFA.2013.011
Walid, Hegazy. (2005). Fatwas and the fate of Islamic finance: A critique of the practice of fatwa in contemporary Islamic financial markets. Islamic finance: Current legal and regulatory issues, 133-149.
Warsame, M.H., Ireri, E.M., Does the theory of planned Behaviour (TPB) matter in Sukuk investment decisions?. Journal of Behavioral and Experimental Finance (2016), http://dx.doi.org/10.1016/j.jbef.2016.10.002
Published
2025-10-15
How to Cite
OKTAVIANA, Ulfi kartika.
DETERMINANTS OF GREEN SUKUK INVESTMENT IN INDONESIA.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 421-432, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3489>. Date accessed: 12 may 2026.
Section
Articles
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