Year: 2026
Type: article
Abstract: POJK Regulation No. 51/POJK.03/2017 encourages financial service institutions in Indonesia, including Sharia banks, to implement and report on sustainable finance practices. However, this pressure for legitimacy risks giving rise to “greenwashing” a gap between published sustainability claims and the substance of actual practices. This article aims to develop a conceptual framework for assessing the credibility of green banking claims made by Sharia banks by integrating conventional greenwashing literature (legitimacy theory, signaling theory, and the concept of decoupling) with Maqasid al-Shari'ah principles, specifically hifz al-nasl (preservation of progeny/the environment) and hifz al-din (preservation of religion). Employing a conceptual analysis approach and a critical literature review, the study constructs a “Green Claim Credibility Framework” that maps green banking claims across three levels of verification: symbolic, procedural, and substantive. The findings indicate that the risk of greenwashing in Sharia banks is twofold, involving not only environmental discrepancies but also the potential misuse of the religious legitimacy inherent in the Sharia identity. This article contributes to expanding the greenwashing discourse through the lens of Islamic ethics and offers a practical diagnostic tool for Sharia Supervisory Boards, regulators, and Sharia bank management to assess the authenticity of sustainability claims prior to publication.
Institution: Walisongo State Islamic University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7225463191