The comparison between Islamic ethics and ESG is made so routinely that it has stopped being examined. Both care about the environment, both care about social outcomes, both constrain profit-seeking; therefore they align, and Islamic finance can be presented as ESG with a longer pedigree.

The alignment is real but partial, and the places where the two frameworks diverge are more interesting than the places they agree. Islamic environmental ethics rests on premises that ESG does not share, and it makes demands that ESG does not make.

Three Concepts That Do the Work

Khalifa: stewardship. The Quranic framing positions humanity as trustee of the earth rather than owner of it. This is not a metaphor about corporate responsibility; it is a claim about the nature of property. A trustee holds subject to obligations owed to the one who entrusted, and is accountable for the condition in which the trust is maintained.

The practical implication is that environmental obligation is not contingent on stakeholder pressure, regulatory requirement or business case. It is owed regardless of whether anyone is measuring, a materially different foundation from ESG, which is generally justified by risk management and long-term shareholder value.

Mizan: balance. The Quran describes creation as established in balance, with an explicit injunction not to disturb it. This grounds an obligation toward systemic integrity rather than merely toward measurable harm. A business operating within every applicable emissions limit may still be implicated if its aggregate effect degrades the balance of a system.

Israf and tabdhir: excess and squandering. Both are explicitly prohibited. Israf covers consumption beyond need; tabdhir covers destruction or waste of resources. Notably, the prohibition applies even where the resource is abundant and lawfully acquired, the classical example being the instruction not to waste water even at a flowing river.

This is the concept that puts Islamic ethics into direct tension with a great deal of contemporary commercial practice, and it deserves more attention than it gets.

Where Islamic Ethics Is More Demanding Than ESG

Three divergences are worth stating plainly.

Consumption itself is a moral category. ESG evaluates how goods are produced. It has very little to say about whether they should be produced at all. Islamic ethics, through israf, treats stimulating consumption beyond need as ethically problematic in itself.

This lands awkwardly on marketing, which is largely in the business of doing precisely that. A brand can produce sustainably, report impeccably and still be engaged in encouraging excess. Planned obsolescence, artificial scarcity, aggressive upselling and fashion cycles designed to render functional goods socially obsolete all sit uncomfortably against israf regardless of how well the supply chain scores.

Offsetting is theologically awkward. Carbon offsetting rests on fungibility, harm here compensated by benefit there. Islamic ethical reasoning is generally more attentive to the character of the act than to net accounting. Whether purchasing offsets discharges the obligation of khalifa, or merely purchases permission to continue, is a real question that Islamic finance has largely avoided asking.

Waste is prohibited, not merely inefficient. In ESG frameworks, waste reduction is justified by cost and emissions. In Islamic ethics, waste is prohibited conduct. That converts an optimisation problem into a compliance problem, with a different threshold for acceptable performance.

Where the Frameworks Genuinely Converge

The overlap is substantial and should not be understated:

Animal welfare, where Islamic tradition contains extensive and specific requirements about treatment, slaughter, transport and the prohibition of causing unnecessary distress
Water stewardship, where classical jurisprudence developed detailed allocation rules and a strong presumption of shared right
Land use, including the hima tradition of protected conservation reserves, one of the oldest continuously practised forms of formal habitat protection anywhere
Intergenerational obligation, which the trusteeship framing supports directly and which maps closely onto sustainability’s core premise
Labour treatment, where obligations regarding fair wages, prompt payment and working conditions are explicit and specific

An institution taking these seriously will look, from the outside, much like a well-run ESG programme. The reasoning differs; much of the behaviour does not.

The Screening Gap

Islamic finance has an established negative screening apparatus: alcohol, gambling, conventional interest, pork, adult entertainment, weapons in some interpretations. Environmental harm has historically not featured in it.

The result is a genuine anomaly: a fund may be fully Shariah-compliant while holding significant positions in businesses with severe environmental externalities, because the screening criteria never contemplated them. Several scholars have argued this is a failure of the screening methodology rather than of the underlying ethics, and that khalifa and mizan plainly imply environmental criteria.

Movement is happening. Green sukuk issuance has grown substantially, several Islamic index providers have layered environmental criteria onto Shariah screens, and Malaysia’s value-based intermediation framework represents a serious attempt to align Islamic finance practice with maqasid al-shariah outcomes rather than contract-level compliance alone.

But the mainstream Shariah screen remains predominantly sector- and ratio-based. Closing that gap is the most consequential unfinished work in the field.

What This Means for Marketing Practice

For practitioners, Islamic environmental ethics generates requirements that go beyond standard sustainability communication:

Claims must be accurate, because gharar (deceptive uncertainty) and misrepresentation are independently prohibited. Greenwashing is not merely a reputational risk; it is a distinct ethical violation.
Sufficiency messaging is permissible and defensible, in a way it rarely is commercially. Encouraging customers to buy less, repair, or keep products longer aligns with israf, and brands operating in Muslim markets can make that argument from shared premises rather than against them.
Packaging and single-use design invite scrutiny under tabdhir that goes beyond regulatory compliance.
Supply-chain labour conditions are not a separate “S” pillar but part of the same obligation structure.

The Research Frontier

This area is under-theorised relative to its potential, and several questions are genuinely open:

Does Islamic ethical framing change consumer behaviour more than secular environmental framing? If sustainability messaging grounded in khalifa outperforms generic green messaging among Muslim consumers, that is a directly actionable finding, and the comparative studies have barely been run.
Can environmental criteria be integrated into Shariah screening with methodological rigour rather than as an overlay?
How do Muslim consumers reconcile religious environmental obligation with consumption practice? The attitude-behaviour gap is well documented generally; whether religious grounding narrows it is unknown.
What would an israf-consistent marketing practice actually look like in a competitive market? This is the hardest question, because it asks whether a discipline built substantially on stimulating demand can operate within a framework that treats excess as prohibited.

That final question is uncomfortable, which is a reasonable indication that it is worth asking. Islamic marketing scholarship has spent considerable effort demonstrating compatibility between Islamic ethics and contemporary commercial practice. The more valuable contribution now may be a careful account of where they are not compatible, and what a discipline that took the tension seriously would change.

Khalifa, Mizan, Israf: Islamic Environmental Ethics Beyond the ESG Checklist