By Rushdi Siddiqui,
Climate change is destroying our path to sustainability. Ours is a world of looming challenges and increasingly limited resources. Sustainable development offers the best chance to adjust our course. Bai Ki Moon, Secretary General of United Nations.
In the span of last two weeks, I presented/moderated at two events in Malaysia and Singapore, Responsible Finance and Middle East-Asia Islamic Finance Congress, respectively, and we may be seeing the beginning of the enlarging narrative for the collateral based, prohibition oriented and negative screening $1.5 Trillion Islamic finance industry.
After 40 years, it seems that Islamic finance may have reached its stage one natural ceiling on growth, expansion, and traction. Thus, a self-disruption, or the more diplomatic term of ‘innovation,’ needs to take place. The disruption is not a new product or structure off of the commonly utilized (read: excessive) commodity Murabaha, but something that’s need to be more transformational to pierce the ceiling into stage two: SUSTAINABILITY.
Sustainability: Environmental Science. The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.
Will sustainability expand and extend the Islamic finance narrative?
Will sustainability result in cross sell of Islamic finance to non-Muslims and up-sell to Muslim Millennials?
Will Sustainability inject ‘responsible’ finance into Islamic finance?
Lets start the conversation of sustainability and several verticals of the Muslim Lifestyle marketplace.
I have not included $1 Trillion plus halal food/beverage/ingredients, second largest vertical after $1.7 Trillion Islamic finance, as that requires a stand-alone article, but needs to be aligned to ‘organic,’ an inter-changeable word of Sustainability.
Is today’s halal tourism enough for Muslims? Yes, but… The MasterCard-Crescentrating Global Muslim Travel Index (GMTI)- launched in 2015 and updated in 2016- provides the lay of the landscape for Muslim and non-Muslim friendly country destinations. Thus, halal hotels, halal restaurants, etc., are two of many metrics used in GMTI in ranking country destinations. But, we need to look ahead for next 5-10 years, as Muslim friendly/halal needs to be combined with our responsibility as stewards of the planet Earth. We need to leave it in a better shape/place than we found it.
Thus, the halal hotels/resorts should also be sustainable (eco-friendly), where the hotel infrastructure and amenities are aligned to be Earth friendly. For example, water efficient hotel shower heads, wooden furniture from responsible ‘de-foresting,’ meaning planting trees for every logged, bed sheets/comforter from responsible certified suppliers/factories, mini-fridge stocked by local suppliers/farmers, etc.
Thus, halal food, alcohol free premises, separate timing for men/women swimming pools hours, ceiling direction for Kibla, prayer rug, etc., serves the Muslims, but, combining with eco-sustainability serves humanity. It’s the ‘walk’ of the halal tourism talk.
If a halal sustainable hotels can be financed Islamically or refinanced Islamically (assuming economically makes sense), then the spark of commencing convergence.
For example, Muslim majority countries like Maldives, Malaysia or Turkey are probably best situated to pilot a ‘sustainable halal friendly hotel’ project.
There is a natural alignment between sustainable (eco-friendly) and halal cosmetics, meaning both are generally free from animal testing, animal ingredients, alcohol, etc. For example, halal cosmetic items like lipstick, blush, make-up, etc., if halal label is removed, it could be positioned to non-Muslims as eco-friendly.
Again, it’s about the narrative that connects.
A 2015 story from India (Source: The Times of India, 4 September 2015, http://timesofindia.indiatimes.com/india/Halal-cosmetics-brand-sets-up-shop-in-Gujarat/articleshow/41645488.cms) is about “Iba” (a brand from Ecotrail Personal Care), a startup by two Hindu sisters, Mauli and Grishma Teli, and first halal cosmetics to be launched in the country. The sisters realized that India has the second largest Muslim population after Indonesia, and large percentage of their customers are non-Muslims who buy the halal cosmetic product because they are vegan, cruelty free and free of harmful chemicals.
Iterating again, it’s also about the narrative for the cross sell, where the emphasis is on the process and ingredients.
The USD76 billion halal pharmaceutical industry is of equal importance (to halal food and cosmetics) as it is about Muslim intake, ingestion or injection. The demand has been growing over the years and as a result the first standard for halal pharmaceuticals was created in early 2011, Malaysian Standard MS 2424:2010 (P): Halal Pharmaceuticals: General Guidelines, to cater to the pharmaceuticals industry’s supply chain from processing to handling, packaging, labeling, distribution, storage and display of medicines and health supplements.
Would the above description and standards qualify as part of sustainable pharma? May be, the halal pharma standards can provide guidelines to the sustainable pharma industry because it hits most of the touch points. Thus, halal pharma can actually lead the sustainable pharma industry.
This may be one of the important ingredients for establishing sustainable halal medical tourism/wellness in places like Malaysia, Indonesia, Turkey, and even India. Thus, the sustainable ‘ingredient’ becomes the ingredient as a pull factor.
Modest (Muslimah) fashion needs to be Sustainable! What does that mean?
The Muslim lifestyle includes the third largest vertical, the USD224 Billion modest fashion sector. Today, the existing markets are mature and saturated, as a result, international brands are targeting Muslim women with income and demand for modest fashionable wear.
NOTE: Muslim women are the trend-setters and (below-mentioned) designers are the trend spotters.
For example, internationally, designers are embracing the Muslim patrons with campaigns and collections geared towards Muslim lifestyle. Dolce & Gabbana, DKNY, Mango and Uniqlo are some of the examples. For example, Donna Karan debut DKNY’s first ever Ramadan Capsule Collection with its own hashtag #DKNYRamadan. The collection is longer, more modest silhouettes and dusty hues are modelled by Middle East fashion personalities such as Yalda Golsharifi and Tamara al Gabbani. Spanish fashion chain Mango, launched a new Ramadan collection in une 2015. The collection will consist of mainly evening wear for women. Mango has been creating Ramadan collections for its Muslim shoppers in other parts of the world for some time now. Uniqlo, a Japanese company teamed up with Hana Tajima for the Hana Tajuma Life Wear collection that she designed which includes hijabs and Muslimah fashion.
But, two important questions to ask the modest fashion industry:
Are your products manufactured in factories free of child labor? Women get regular breaks? Bathrooms are proportionate to number of occupants? Food available has nutrition value?
Does modest fashion clothing end up cluttering landfills? Do sellers have policies in places where ‘pre-loved’ hijabs, jubas, shawls, etc., can be collected and distributed to girls/women in villages or other countries?
Today, Muslim fashion modest designers do not have the brand name recognition of a Uniqlo, DKNY, etc., but their approach on where sourced/stitched and how pre-loved items are disposed makes for sustainable leadership. Yes, it may cost a little more, but it’s an investment in the people in the supply chain.
Sustainability surely cannot be only a ‘feel-good talking topic’ at Islamic finance events, it needs to be agenda item for execution.
In the 21st century, I think the heroes will be the people who will improve the quality of life, fight poverty and introduce more sustainability. Bertrand Piccard.
Are there other examples of convergence opportunities between Muslim Lifestyle marketplace verticals and Sustainability.
A global e-commerce platform for sustainability products has been established in Malaysia, a start-up called: www.globalecomall.com
(Rushdi Siddiqui, CEO of Zilzar Tech, Chairman of Zywary Foundation.)