Central bank measures in the monetary area In the conventional monetary policy domain, since there was no inflationary risk over the relevant horizon owing to the deterioration of the economic outlook, the central banks’ priority has been preventing the disinflationary process in the Western economies from translating into deflation. Back in October 2008, in a concerted move the central banks of the main economics cut interest rates by 50 basis points, and this was followed by further cuts in late 2008 and early 2009. Currently, after an unprecedented monetary impulse, rates stand at one of the lowest points in history. The narrowing of the room for manoeuvre for conventional monetary policy measures gave a leading role to liquidity-provision policies and the implementation of exceptional or non-conventional measures, aimed at ensuring the transmission of interest rate cuts to agents’ financial costs and to facilitating their access to funding. Since the crisis began in August 2007, there have been numerous innovations in monetary policy implementation. These have involved increasing the number of institutions with access to central bank funding; extending the collateral eligible in monetary policy operations; lengthening the maturities at which liquidity was supplied to the market; and public and private asset-purchase programmes (or loans to the private sector for such purchases). As a result, there has been an unprecedented expansion in the balance sheets of the central banks concerned, and a substantial change in the composition of their assets.

Industry platforms such as VBI-COP and the JC3 could potentially play a central role to ‘intermediate’ the data. As a first step, conversations between the Islamic banking and takaful operators to identify impact-driven and innovative financial solutions under VBI and VBIT, can take place to facilitate respective outreach to the underserved or unbanked population. Outside the financial sector, FIs can embark on collaborations with organisations sharing similar sustainability aspirations including state religious authorities, waqf institutions, business industry associations and advocacy groups, or non-governmental organisations who are at the heart of the vulnerable communities. For example, FIs can collaborate with government agencies and utility companies to support the consumers’ shift to energy-efficient residential homes or vehicles. Beyond the existing sustainable financial products offering preferential rates for the purchase of electric vehicles (EV) or green residential properties, more can be done to raise consumer awareness and to develop complementary infrastructure namely, charging stations. Initiatives such as the development of the VBIAF sectoral guides which are now underway for the manufacturing, construction and infrastructure, as well as oil and gas sectors, is a step in the right direction to streamline the cross-sectoral understanding of sustainability issues, thus allowing for better coordination of efforts to address sustainability risks throughout the value chain. In conclusion, it is our fervent hope that with sustainability, an innovative and collaborative mindset, we can come to develop value-driven solutions and discover new avenues for synergistic collaboration.