The Influence of Islamic Environmental Ethics on Business Decision-Making and Corporate Social Responsibility Practices
DOI:
https://doi.org/10.70062/greeneconomics.v1i3.415Keywords:
Corporate Responsibility, Environmental Sustainability, Ethical Governance, Islamic Ethics, Sustainable BusinessAbstract
This study explores the influence of Islamic environmental ethics on Corporate Social Responsibility (CSR) and business decision-making, emphasizing how faith-based ethical frameworks guide sustainable practices in contemporary corporate environments. Grounded in the principles of stewardship (khalifah), justice (adl), and collective welfare (maslahah), Islamic ethics provide a holistic model for aligning profitability with moral and environmental responsibility. Using a mixed-method approach that combines survey research and content analysis, data were collected from 50 Shariah-compliant and ethically oriented companies across multiple industries. The survey measured the integration of ethical values into CSR initiatives, while content analysis of corporate reports evaluated transparency, environmental commitment, and ethical disclosures. The findings reveal that organizations adhering to Islamic ethical principles exhibit stronger environmental accountability, higher ethical compliance, and more sustainable long-term strategies compared to secular firms. These companies perceive environmental responsibility as a moral obligation rather than a regulatory requirement, integrating ethical governance into daily operations and strategic planning. The results also highlight that employee engagement and stakeholder trust improve significantly when CSR activities are guided by Islamic values. Furthermore, case studies of Islamic banks and small-to-medium enterprises (SMEs) in Muslim-majority regions demonstrate practical applications of these principles, including the use of zakat and waqf funds for environmental initiatives and community development programs. The study concludes that embedding Islamic ethics into business operations fosters a balance between economic growth, social welfare, and environmental stewardship. It also provides a pathway for strengthening corporate integrity and long-term competitiveness. Future research is recommended to examine the applicability of Islamic ethical principles across different industries and explore their intersection with emerging areas such as green innovation, artificial intelligence governance, and digital finance. Overall, this research underscores the potential of Islamic ethics as a foundation for sustainable business models that harmonize spiritual and economic objectives.
References
Abdelzaher, D. M., Kotb, A., & Helfaya, A. (2019). Eco-Islam: Beyond the principles of why and what, and into the principles of how. Journal of Business Ethics, 155(3), 623-643. https://doi.org/10.1007/s10551-017-3518-2
Aziz, Y., Ullah, R., Mansor, F., & Abdullah, L. H. (2022). Islamic practices and small and medium enterprises performance: Is corporate social responsibility a missing link? Journal of Public Affairs, 22(2), e2314. https://doi.org/10.1002/pa.2314
Bhuiyan, M. A. H., Darda, M. A., & Hossain, M. B. (2022). Corporate social responsibility (CSR) practices in Islamic banks of Bangladesh. Social Responsibility Journal, 18(5), 968-983. https://doi.org/10.1108/SRJ-07-2020-0280
Boas, F. R. V., & Machado, C. F. (2024). Social responsibility as a lever for the circular economy. In Circular Economy and Manufacturing (pp. 217-238). Elsevier. https://doi.org/10.1016/B978-0-443-14028-0.00011-6
Czerny, M., & Kowalczyk, M. (2022). Reporting to God: The religious background of corporate social responsibility in Islamic enterprises – airlines. Zeszyty Teoretyczne Rachunkowosci, 46(4), 27-50. https://doi.org/10.5604/01.3001.0016.1301
Diab-Bahman, R. (2024). Sustainable business in the Arab region: Corporate social responsibility vs culture. Sustainable Business in the Arab Region: Corporate Social Responsibility vs Culture (pp. 1-113). https://doi.org/10.1108/9781835493267
Gunardi, A., Herwany, A., Febrian, E., & Anwar, M. (2022). Research on Islamic corporate social responsibility and Islamic bank disclosures. Journal of Sustainable Finance and Investment, 12(4), 1308-1329. https://doi.org/10.1080/20430795.2021.1874211
Hassan, A. (2016). Islamic ethical responsibilities for business and sustainable development. Humanomics, 32(1), 80-94. https://doi.org/10.1108/H-07-2015-0047
Hassan, R. (2024). Islamic sustainable finance paradigm. In Islamic Sustainable Finance: Policy, Risk and Regulation (pp. 5-14). Routledge. https://doi.org/10.4324/9781003395447-3
Hussein, J. M., Abdullah, S. K., Zuhair, M., Dahash, Z. M., & Maksutalievna, A. M. (2024). Islamic legal perspectives on climate change and global policy frameworks. Al-Istinbath: Jurnal Hukum Islam, 9(2), 723-742. https://doi.org/10.29240/jhi.v9i2.11185
Ilyas, M. (2018). Islamic work ethics and corporate social responsibility in business organizations: Issues and challenges. Academy of Accounting and Financial Studies Journal, 22(Special issue). https://doi.org/10.1108/AAFS-02-2024-0058
Jabbar, S. F. A., Ali, H. M., Mohamed, Z. M., & Jalil, F. (2018). Business ethics: Theory and practice in an Islamic context. In Accounting, Finance, Sustainability, Governance and Fraud (pp. 257-271). https://doi.org/10.1007/978-981-10-8062-3_14
Kurbiyanto, A., Yusmaliana, D., Fitriana, F., Altiarika, E., & Sabri, F. (2024). Environmental ethics in Islamic teachings: Discussing ethical principles in Islamic teachings that emphasize environmental protection and preservation. In World Sustainability Series, Part F3673 (pp. 15-34). https://doi.org/10.1007/978-981-97-8772-2_2
Leong, V. S., Sarabia-Panol, Z., & Muhamad, N. (2024). National philosophy and religion on corporate social responsibility/public relations initiatives: A case study of Islamic influence in Brunei business system. Asian Journal of Business Ethics, 13(1), 107-135. https://doi.org/10.1007/s13520-023-00190-5
Lokhandwala, Z. (2022). Environmental ethics in Islam and greener shifts away from fossil fuel dependence in the Middle East. In Environmental Constitutionalism in the Anthropocene: Values, Principles and Actions (pp. 86-103). Routledge. https://doi.org/10.4324/9781003175308-7
Manasakis, C. (2018). Business ethics and corporate social responsibility. Managerial and Decision Economics, 39(4), 486-497. https://doi.org/10.1002/mde.2921
Moscato, D. (2017). Corporate social responsibility: Committing to social and environmental impact in the global economy. In The Handbook of Financial Communication and Investor Relations (pp. 221-231). Wiley. https://doi.org/10.1002/9781119240822.ch20
Mulia, P., Behura, A. K., & Kar, S. (2017). Corporate environmental responsibility for a sustainable future. Problemy Ekorozwoju, 12(2), 69-77. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85020078950&partnerID=40&md5=0e93ffc339379af8036a3e05ad5d9fe1
Murphy, M. J., & Smolarski, J. M. (2020). Religion and CSR: An Islamic “political” model of corporate governance. Business and Society, 59(5), 823-854. https://doi.org/10.1177/0007650317749222
Ng, H. S., & Kee, D. M. H. (2024). Understanding ethical attitudes: Exploring personal ethics and ethical climate in conceptual framework. In Ethical Quandaries in Business Practices: Exploring Morality and Social Responsibility (pp. 313-338). IGI Global. https://doi.org/10.4018/979-8-3693-3948-0.ch013
Omercic, J. (2024). Islamic approach to energy justice. In Sustainable Development Goals Series, Part F3606 (pp. 153-165). https://doi.org/10.1007/978-981-97-6059-6_11
Passas, I. (2024). The evolution of ESG: From CSR to ESG 2.0. Encyclopedia, 4(4), 1711-1720. https://doi.org/10.3390/encyclopedia4040112
Raza, S. A., Khan, K. A., & Hakim, F. (2024). Whether organizational citizenship behavior is triggered by employee CSR perception and spiritual values: The moderating role of Islamic work ethics. Management Research Review, 47(3), 353-373. https://doi.org/10.1108/MRR-10-2022-0714
Shahid, A. U., Patel, C., & Pan, P. (2022). Corporate social responsibility, intrinsic religiosity, and investment decisions. Journal of Behavioral and Experimental Finance, 34, 100650. https://doi.org/10.1016/j.jbef.2022.100650
Sharma, S., & Ranaut, A. (2024). A proposed framework for corporate socially responsible sustainable growth using blockchain ISM MICMAC approach. In 2nd International Conference on Sustainable Computing and Smart Systems, ICSCSS 2024 - Proceedings (pp. 507-510). IEEE. https://doi.org/10.1109/ICSCSS60660.2024.10625512
Shaukat, M., Shafique, B., & Madbouly, A. (2024). Islamic framework for behavioral and socio-economic justice. In Islamic Finance in the Modern Era: Digitalization, FinTech and Social Finance (pp. 52-78). Routledge. https://doi.org/10.4324/9781003366751-5
Sofyan, A. S., Rusanti, E., Nurmiati, N., Sofyan, S., Kurniawan, R., & Caraka, R. E. (2024). Islam in business ethics research: A bibliometric analysis and future research agenda. International Journal of Ethics and Systems. https://doi.org/10.1108/IJOES-02-2024-0058
Sumi, A. A., Ahmed, S., & Alam, S. S. (2024). Islamic teachings and environmental corporate social responsibility in Bangladesh: A mixed-methods research approach. Journal of Islamic Marketing, 15(4), 1155-1182. https://doi.org/10.1108/JIMA-09-2023-0271
von Rosing, M., Shepperson, L., Czichos, H., & Seibert, S. (2024). Business ethics 2.0: The what, why, and how and practical suggestions. In The Sustainability Handbook, Volume 1: The Body of Knowledge around Substantial Sustainability Innovation (pp. 601-611). Elsevier. https://doi.org/10.1016/B978-0-323-90110-9.00021-0
von Rosing, M., Shepperson, L., Foldager, U., Laurier, W., Czichos, H., Arnold, H., Yousaf, M., Fisseau, A., Pinto, J., Spiegel, H. W. J., Kemp, N., Urquhart, B. S., Muhita, D. H., Abele, V., Shyam, A. K., Razek, A. R. A., Svendsen, A. D. M., Solomon, A., Khan, A., Alshebami, A. S., Wijayanayake, A., Dicks, A., Hellmich, C., van Husen, C., Fehrenbach, D., Guerrero, D. C., Niwunhella, D. H. H., Schmidt, F. A., Udakanjalee, H. A. I., Cilliers, J., Schmider, J., Warm, J., González-Páramo, J. M., Baker, H. K., Yogi, K. S., Yeboua, K., Gil, M. J., Khan, M. M., Zakaria, N. I. B., Solomon, P., Zwingenberg, R., Mubarik, S., Kwasi, S., Atapattu, S., Seibert, S., Kaur, T., Schade, U., Ali, W., & Chungyalpa, W. (2024). Why you need sustainable portfolio management in the age of substantial innovation. In The Sustainability Handbook, Volume 1: The Body of Knowledge around Substantial Sustainability Innovation (pp. 73-83). Elsevier. https://doi.org/10.1016/B978-0-323-90110-9.00050-7
Yevdokimova, M., Zamlynskyi, V., Kuznietsov, E., Sakovska, O., & Anatolii, H. (2018). Evolution of social responsibility applied to the concept of sustainable development: Mainstream of the 20th century. Journal of Security and Sustainability Issues, 8(1), 69-78. https://doi.org/10.9770/jssi.2018.8.1(6)
