Abstract

This paper aims to propose a framework for measuring sustainability practices of the Islamic banking industry in Malaysia. Sustainability practicing and reporting has received limited attention in the Islamic banking literature. The frameworks used for measuring sustainability practices are also found inadequate. This study transformed the Global Reporting Initiative’s GRI sustainability measurement framework in light of Shariah principles to make it compatible for measuring sustainability practices in the Islamic banking industry. The posited framework illuminates the positive theoretical relationship between sustainability practices and banks financial performance from the Islamic perspective. This study lends credence to the Islamic Reporting Initiative IRI envisioned framework of building an international standard sustainability measurement framework for the Islamic banking industry in future. This study may also serve as a launching pad in the process of developing an international standards sustainability measurements framework for the Islamic banking industry in the world.

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