Finance
Islamic finance: a powerful solution for climate action – Greenpeace International
Across the globe, Muslim communities find themselves disproportionately affected by climate change, with extreme weather events, rising food insecurity, and other climate impacts taking a toll on their livelihoods, cultural practices, and spiritual life.
In the last few years, devastating floods swept through Pakistan, affecting millions, displacing thousands, and leaving entire communities struggling to rebuild. In Indonesia, one of the world’s most populous Muslim-majority countries, rising sea levels threaten to submerge coastal villages and erode vital agricultural lands. Meanwhile, in parts of the Middle East and North Africa, persistent droughts and water scarcity are increasing pressures on already fragile ecosystems and economies.
The climate crisis is having a profound impact on the daily lives and religious practices of millions of people
These climate pressures extend beyond immediate threats to survival. Climate change has also begun affecting food security in Muslim-majority regions, especially during Ramadan, a holy month where fasting is practised from dawn until dusk. In communities already grappling with the impacts of droughts or floods, maintaining food stocks for Ramadan can become a significant challenge. In Somalia, where cycles of drought and flash floods have eroded food systems, many families are forced to navigate long-standing shortages, with climate-induced shocks compounding existing vulnerabilities.
Food insecurity is a worsening crisis as global warming affects harvests, disrupts fisheries, and drives up food prices, making the observance of Ramadan particularly strenuous, both physically and economically. This brings climate change into the daily lives and religious practices of millions in profound ways, reminding us that the climate crisis is as much a social and economic issue as it is an environmental one.
Islamic finance: a financial system grounded in ethical responsibility
Islamic finance has been operating in the global financial system for decades, providing an ethical foundation rooted in Islamic principles that promote fairness, social responsibility, and environmental stewardship.
Ethical banking is a core pillar of Islamic finance. Through principles like zakat (charity) and waqf (endowment for public good), Islamic finance encourages financial activity that uplifts communities, supports sustainable projects, and avoids investments in industries harmful to people and the planet.
Many Islamic financial institutions in countries like Malaysia, the United Arab Emirates, and Saudi Arabia already support projects aimed at protecting the environment and enhancing social welfare. Success stories are already emerging. Malaysia’s green sukuk initiative has mobilised billions for renewable energy projects, while the UAE’s recent US$3.9 billion in green sukuk issuance demonstrates growing momentum. Saudi Arabia’s Vision 2030 has allocated US$50 billion for renewable initiatives, targeting an emissions reduction of 278 million tons by 2030.
A US$400 billion opportunity for climate action
While Islamic finance principles already provide a framework that aligns well with sustainability, there is still much room to strengthen its role in addressing the climate crisis, enhancing resilience in vulnerable communities, and shifting investments towards clean, renewable energy.
A new report by Greenpeace Middle East & North Africa (MENA) (as part of the Ummah For Earth Alliance) and the Global Ethical Finance Initiative (GEFI), highlights the transformative potential of Islamic finance in accelerating the global transition to renewable energy and addressing the triple planetary crisis: climate change, pollution, and biodiversity loss.
The report shows that the Islamic finance industry continues its robust expansion, with assets projected to reach USD$ 6.7 trillion by 2027, and that a strategic allocation of just 5% toward renewable energy and energy efficiency initiatives could mobilise approximately USD$ 400 billion by 2030 – a transformative sum for climate-vulnerable regions.
Islamic finance can help foster climate-resilient infrastructure, restore and protect biodiversity, and finance climate adaptation projects in at-risk communities. By explicitly directing funds away from fossil fuels and into green energy projects, Islamic financial institutions like the Islamic Development Bank (IsDB) can lead by example, especially in regions that are both vulnerable to climate impacts and hold significant influence in the global fossil fuel market. These institutions must accelerate their commitment to renewable energy investments.
As climate impacts intensify, Islamic finance offers a bridge between faith-based values and practical climate solutions. The convergence of Islamic finance and climate action represents more than a financial opportunity – it’s a moral imperative aligned with Islamic principles of environmental stewardship (khalifah) and balance (mizan).
Islamic finance, grounded in ethical principles and community responsibility, has a unique role to play in the global climate movement, particularly in the Global South. For millions across the globe, this form of finance offers a culturally relevant and powerful instrument to not only protect their communities from the worsening climate crisis but to promote environmental and economic sustainability in ways that align with their beliefs. Islamic finance offers a bridge between economic strength and ethical stewardship, creating pathways toward a more equitable and sustainable world for all.
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For a company navigating one of the most consequential transformations in its history, financial clarity is not optional—it is essential. Natura &Co, the Brazilian personal care and cosmetics group behind iconic brands such as Natura and Avon, has long been committed to combining purpose-driven business with commercial performance. After a period of strategic portfolio reshaping, including the divestiture of its Aesop and The Body Shop holdings, the company is now sharpening its focus on profitability and operational excellence across Latin America and global markets.
At the center of that effort sits a deceptively complex challenge: understanding, in real time, which revenue and cost factors are driving or eroding gross margin across a highly diversified business. For years, answering that question meant manual reporting, delayed insights, and finance teams spending valuable time on data gathering rather than analysis.
That’s now changing, thanks to a co-innovation initiative developed together with SAP and Numen, a global SAP partner specializing in digital transformation and enterprise software implementation.
From manual reporting to proactive decision intelligence
The project’s goal was to replace a labor-intensive gross margin analysis process with a generative AI application embedded directly into Natura &Co’s financial workflows. Built on SAP Business AI Platform, SAP’s unified foundation integrating business technology, data, and AI capabilities, the application connects directly to data in SAP S/4HANA to provide finance teams with automated insights and narrative recommendations in real time, without the need for manual data pulls or offline reporting.
The application enables users to explore revenue, cost, and margin drivers interactively, identifying at a glance which elements are protecting or eroding margin performance across markets and product lines. Crucially, human oversight remains central to the design: the AI application generates insights, while finance professionals retain full control over interpretation and decisions.
“The implementation of gross margin analysis using AI in SAP S/4HANA marked an inflection point in the analytical capability of our finance area,” said Rogério Dias Garcia, tech manager, ERP Latam, Natura &Co. “We overcame delays and raised the standard of insights by integrating margin analysis from SAP S/4HANA with a large language model connected via the SAP AI Core layer. This architecture allowed us to provide, in an agile, secure, and completely anonymous manner, a stratified and precise view of gross margin offenders and protectors—discriminating exactly which revenue or cost elements were driving market performance.”
A collaborative architecture for scalable AI adoption
Natura &Co’s application derived from a prototype SAP partner Numen created in early 2024 at SAP’s global Hack2Build on business AI, leveraging the generative AI capabilities of SAP Business AI Platform. The solution was designed and developed through close collaboration between Natura &Co, Numen, and SAP. From the outset, the approach was to align AI adoption with concrete business priorities, ensuring the application would be scalable and production-ready rather than a standalone prototype.
Numen brought deep SAP implementation expertise to the project, combining knowledge of SAP S/4HANA architecture with hands-on experience in building solutions on SAP Business AI Platform. The technology stack—SAP S/4HANA, SAP AI Core, SAP Fiori, and SAP Business Technology Platform—provided the secure, integrated foundation needed to connect financial data with generative AI capabilities in an enterprise context.
“SAP enabled the transformation by providing the technological foundation and expert support,” said Carlos Aravechia, head of Data Design & Intelligence at Numen.
The success of the project has validated a broader conviction at Natura &Co: that generative AI, embedded directly in ERP workflows, can fundamentally reposition finance from a transactional function to a strategic business partner.
A blueprint for other businesses
The Natura &Co project demonstrates a pattern that other organizations can replicate, particularly those running SAP S/4HANA. The combination of structured ERP data with the contextual reasoning capabilities of large language models creates a foundation for decision intelligence that goes well beyond traditional business intelligence tools.
The project was built within a six-month co-innovation sprint and went live in August 2025. It is currently in use across Natura &Co’s Equador operations.
Looking ahead, Natura &Co is already planning the next phase: integrating Joule Agents to further automate the extraction of standard analytical content and deepen the AI-driven optimization of financial processes.
“The success of this initiative validates the transformative potential of embedded AI within our ERP,” Dias Garcia noted. “We are now ready to move forward—deepening these insights and integrating the capability of Joule Agents to maximize the extraction of standard content and further optimize our business decisions.”
For SAP customers evaluating how to move from AI experimentation to AI in production, the Natura &Co project offers a concrete, replicable model: start with a high-value, well-defined business process, embed AI directly into existing workflows, and build in human oversight from the start.
A girl from a disadvantaged rural family in central China topped this year’s gaokao, attracting numerous live-streamers eager to finance her education, which she declined.
The home of 18-year-old secondary school graduate Han Yaping in a Henan province village was recently bustling with live-streamers.
This attention came after Han achieved an impressive score of 699 out of 750 in the gaokao, China’s national college entrance exam.
She has received offers from China’s two leading universities, Tsinghua University and Peking University.
Han’s accomplishment is particularly remarkable given her family’s impoverished circumstances.
Her mother suffers from ankylosing spondylitis, an inflammatory arthritis affecting the spine, preventing her from working. Her father, who earns a living through farming and odd jobs, serves as the family’s sole provider. Han also has a younger sister.
The UK’s Financial Conduct Authority (FCA) published a landmark review on Monday that proposes recommendations to regulate the impact of artificial intelligence (AI) on the financial decisions made by consumers.
The review, titled the Mills Review, anticipates that both consumers and firms will start delegating “more financial decision-making to AI systems,” including for agreements, initiating transactions, and executing decisions “within agreed parameters.” One of the key findings of the review outlined that while AI can help bridge advice gaps and “support growth,” there remain risks “associated with fraud, cyber security, and consumer harm.” Conducting the review, Sheldon Mills highlighted that “AI can also amplify risks: bias, discrimination, exclusion, opaque decision-making (particularly when multiple AI models interact), misleading or hallucinatory advice and erosion of consumer trust.”
The review stated that presently, one in five adults in the UK are “already open to AI making decisions for them,” particularly when decisions feel “complex or high stakes.” It found that roughly 26 percent of the population “trust general-purpose tools such as ChatGPT, Claude or Gemini for financial advice” with little awareness that such platforms provide no “formal routes to recourse” or protections.
Overall, the Mills Review identified four areas that it anticipates will be impacted by AI in the financial sector: “the transformation of firms,” “new consumer journeys,” “a reshaped competition landscape,” and “amplified financial crime and cyber risk.” The FCA projected the shift in how consumers and firms consult AI to take place by 2030.
The Mills Review put forth seven “priority” recommendations to be considered by the FCA Board. It recommended that any transitions to autonomous AI models be monitored and that regulatory frameworks and perimeters be adapted and secured. The review called for the strengthening of “system-wide coordination and oversight,” the scaling up of the FCA’s AI Lab to enable it to support AI models and innovation for agentic finance, and an “AI-enabled agentic supervisory model” to be built and adopted. Finally, it recommended that a trusted “public-interest AI-enabled financial capability service” be developed.
The FCA announced, in the press release, that it will launch an AI “good and poor practice publication” in late 2026.
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