Public Sentiment on Sustainable Finance and Implications for Islamic Banks

Authors

  • Nurul Izzati Septiana Universitas Islam Raden Rahmat, Malang, Indonesia
  • Randi Swandaru INCEIF University, Kuala Lumpur, Malaysia
  • Fahmi Ali Hudaefi University of Szeged, Szeged, Hungary

DOI:

https://doi.org/10.12928/jreksa.v11i2.10441

Keywords:

Sustainable finance, Challenges and strategies, Sentiment analysis

Abstract

This paper attempts to identify the challenges and strategies for implementing sustainable finance in Islamic banking and to analyze public opinion on sustainable finance on the Twitter platform using sentiment analysis. The research methods used in this study are the Analytical Network Process (ANP) method to answer the first research objective and the sentiment analysis method, which can assess public opinion based on emotions and sentiments in a particular text to answer the second research objective. The results of the study identified several challenges and priority strategies for implementing sustainable finance in Islamic banks. They identified the sentiment of words that can be used to design communication strategies to create a positive image for the company because it is associated with sustainable finance. This study may contribute to enhancing the implementation of sustainable finance in Islamic banks and better communicating with the public on this matter.

References

Abedifar, P., Ebrahim, S. M., Molyneux, P., & Tarazi, A. (2015). Islamic Banking and finance: Recent empirical literature and directions for future research. Journal of Economic Surveys, 29(4), 637–670. https://doi.org/10.1111/joes.12113

Ahlström, H., & Monciardini, D. (2021). The regulatory dynamics of sustainable finance: Paradoxical success and limitations of EU reforms. Journal of Business Ethics, 177(1), 193–212. https://doi.org/10.1007/s10551-021-04763-x

Ahmed, H. (2012). The Islamization of economies and knowledge. American Journal of Islamic Social Sciences, 29(4), 22–45. https://doi.org/10.35632/ajiss.v29i4.313

Bauer, R., Ruof, T., & Smeets, P. (2018). Get real! Individuals prefer more sustainable investments. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3287430

Chakraborty, B. (2017, June). Paris Agreement on climate change: US withdraws as Trump calls it "unfair." Fox News.

Dyck, A., Lins, K. V., Roth, L., & Wagner, H. F. (2019). Do institutional investors drive corporate social responsibility? International evidence. Journal of Financial Economics, 131(3), 693–714. https://doi.org/10.1016/j.jfineco.2018.08.013

El-Gamal, M. a. (2006). A simple fiqh-and-economics rationale for mutualization in Islamic financial intermediation. June, 1–10.

European Commission. (2018). Final report of the High-Level Expert Group on sustainable finance.

European Commission. (2021). Overview of sustainable finance.

Fletcher, R. (2012). Capitalizing on chaos: Climate change and disaster capitalism*. April 2010, 97–112.

FTSE Russel. (2018). Smart beta: 2018 global survey findings from asset owners.

Hachicha, N., & Ben Amar, A. (2015). Does Islamic bank financing contribute to economic growth? The Malaysian case. International Journal of Islamic and Middle Eastern Finance and Management, 8(3), 349–368. https://doi.org/10.1108/IMEFM-07-2014-0063

Hamidi, L., & Worthington, A. C. (2021). How social is Islamic banking? Society and Business Review, 16(1), 51–70. https://doi.org/10.1108/SBR-03-2020-0036

Hassan, M. K., Hudaefi, F. A., & Caraka, R. E. (2022). Mining netizen's opinion on cryptocurrency: Sentiment analysis of Twitter data. Studies in Economics and Finance, 39(3), 365–385. https://doi.org/10.1108/SEF-06-2021-0237

Intan, K. (2019). Gabung IKBI, lima bank ini mendukung upaya keuangan berkelanjutan. https://keuangan.kontan.co.id/news/gabung-ikbi-lima-bank-ini-mendukung-upaya-keuangan-berkelanjutan

Julia, T., & Kassim, S. (2020). Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid shariah framework. Journal of Islamic Marketing, 11(3), 729–744. https://doi.org/10.1108/JIMA-10-2017-0105

Kamla, R., & G. Rammal, H. (2013). Social reporting by Islamic banks: does social justice matter? Accounting, Auditing & Accountability Journal, 26(6), 911–945. https://doi.org/10.1108/AAAJ-03-2013-1268

Kartikahadi, R. H. (2020). Analisis penerapan konsep keuangan berkelanjutan pada bank peserta “First Movers on Sustainable Banking” berdasarkan GRI sektor jasa keuangan dan POJK No. 51/POJK.03/2017 (Periode 2016 - 2018). Skripsi Universitas Katolik Parahyangan.

Khasanah, U., & Wicaksono, A. T. S. (2021). Intermediary performance of Islamic banks in the disruption era: Does it contribute to economic growth? Banks and Bank Systems, 16(1), 103–115. https://doi.org/10.21511/bbs.16(1).2021.10

Khmous, D. F., & Besim, M. (2020). Impact of Islamic banking share on financial inclusion: evidence from MENA. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 655–673. https://doi.org/10.1108/IMEFM-07-2019-0279

Khojastehpour, M., & Johns, R. (2014). The effect of environmental CSR issues on corporate/brand reputation and corporate profitability. European Business Review, 26(4), 330–339. https://doi.org/10.1108/EBR-03-2014-0029

Kraaijeveld, O., & De Smedt, J. (2020). The predictive power of public Twitter sentiment for forecasting cryptocurrency prices. Journal of International Financial Markets, Institutions and Money, 65. https://doi.org/10.1016/j.intfin.2020.101188

Liu, B. (2012). Sentiment analysis and opinion mining. Synthesis Lectures on Human Language Technologies, 5(1), 1–167. https://doi.org/10.2200/S00416ED1V01Y201204HLT016

Liu, B., & Hu, M. (2004). Opinion mining, sentiment analysis, and opinion spam detection. https://www.cs.uic.edu/~liub/FBS/sentiment-analysis.html

Migliorelli, M. (2021). What do we mean by sustainable finance? Assessing existing frameworks and policy risks. Sustainability (Switzerland), 13(2), 1–17. https://doi.org/10.3390/su13020975

Mohammad, S., & Turney, P. (2010). NRC Word-Emotion Association Lexicon (aka EmoLex). https://saifmohammad.com/WebPages/NRC-Emotion-Lexicon.htm

Naeem, M. A., Farid, S., Faruk, B., & Shahzad, S. J. H. (2020). Can happiness predict future volatility in stock markets? Research in International Business and Finance, 54, 101298. https://doi.org/https://doi.org/10.1016/j.ribaf.2020.101298

Nielsen, F. Å. (2011). AFINN. http://www2.imm.dtu.dk/pubdb/pubs/6010-full.html

Otoritas Jasa Keuangan. (2014). Roadmap for sustainable finance in Indonesia 2015-2019. Otoritas Jasa Keuangan, 1–40.

Otoritas Jasa Keuangan. (2018). Pedoman teknis bagi bank terkait implementasi POJK Nomor 51/POJK.03/2017.

Peltier, E., & Sengupta, S. (2021). U.S. formally rejoins the Paris climate accord. - The New York Times. The New York Times.

Qattan, M. A. (2006). Shari'ah supervision: The unique building block of Islamic financial architecture. In Islamic Financial Architecture: Risk Management and Financial Stability (pp. 273–287). Islamic Research and Training Institute.

Reisenzein, R. (2020). Cognitive theory of emotion. In V. Zeigler-Hill & T. K. Shackelford (Eds.), Encyclopedia of Personality and Individual Differences (pp. 723–733). Springer International Publishing. https://doi.org/10.1007/978-3-319-24612-3_496

Sandel, M. J. (2013). The moral economy of speculation: gambling , finance , and the common good. The Tanner Lectures on Human Values.

Shamsudheen, S. V., & Rosly, S. A. (2021). Measuring ethical judgement on ethical choice in an ethical system: a confirmatory study on Islamic banks in UAE. International Journal of Islamic and Middle Eastern Finance and Management, 14(2), 301–316. https://doi.org/10.1108/IMEFM-03-2018-0112

Silge, J., & Robinson, D. (2021). Text mining with R: A Tidy. https://www.tidytextmining.com/sentiment.html

Strauß, N. (2021). Framing sustainable finance: A critical analysis of op-eds in the financial times. International Journal of Business Communication, 232948842110259. https://doi.org/10.1177/23294884211025982

Sukardi, B. (2016). Inklusivisme maqâsid syarî’ah menuju pembangunan berkelanjutan bank syariah di Indonesia. TSAQAFAH, 12(1), 209. https://doi.org/10.21111/tsaqafah.v12i1.375

Sulaiman, F. (2018). OJK dukung pembentukan IKBI oleh 8 bank. WartaEkonomi.Co.Id.

Susilawati, E. (2020). Motivasi dan benefit implementasi keuangan berkelanjutan di Bank Syariah Mandiri. Disertasi Magister Manajemen Universitas Gajah Mada.

UNDP. (2021). Strengthening Indonesia's Climate Finance Governance through Climate Budget Tagging and Green Sukuk Issuance.

UNEP Finance Initiative. (2019). Principles for responsible banking. United Nations Environment Programme-Financial Initiative.

United Nations. (2015). Adoption of the Paris Agreement.

World Economic Forum. (2021, September). 4 things to know about financing sustainable development.

WWF. (2020). Sustainable Banking Assessment 2020. World Wide Fund for Nature.

Yu, X., Mao, Y., Huang, D., Sun, Z., & Li, T. (2021). Mapping global research on green finance from 1989 to 2020: A bibliometric study. Advances in Civil Engineering, 2021, 1–13. https://doi.org/10.1155/2021/9934004

Ziolo, M., Bak, I., & Cheba, K. (2020). The role of sustainable finance in achieving sustainable development goals: Does it work? Technological and Economic Development of Economy, 27(1), 45–70. https://doi.org/10.3846/tede.2020.13863

Downloads

Published

2024-08-28

Issue

Section

Articles