Religious scholars in Bangladesh are advocating for the use of global faith-based finance to help the country adapt to climate change. With the generosity of Muslims around the world, they believe that charitable giving can play a crucial role in supporting poor countries that require significant funds for climate adaptation.
In Bangladesh, where the need for climate adaptation funds is estimated to be around $9 billion annually, Islamic scholars emphasize the importance of charity, particularly Zakat, which is mandatory for all Muslims with wealth above a certain threshold. Zakat alone in Bangladesh has the potential to raise close to $9.8 billion, according to a recent study.
Various forms of Islamic charity, including Zakat, Sadaqah, and Waqf, can be utilized to support those in need, especially those vulnerable to climate-related hazards. Organizations like Wateraid are already using Islamic charitable donations to provide clean water solutions for communities affected by salinity due to climate change.
In Indonesia, religious scholars have issued rulings on how Zakat can be used for climate action, such as building water facilities or planting forests. The convergence of religious scholars and finance experts on the use of Islamic charity for climate needs is seen as a positive step towards addressing the impacts of climate change.
With the potential for Zakat financing to range from 1% to more than 4% of the GDP of Muslim countries, there is a growing recognition of the role faith-based finance can play in supporting the poor and vulnerable in the face of climate change. By leveraging technology and innovative financing mechanisms, faith-based climate finance has the potential to drive meaningful climate action and make a positive impact on communities in need.