Toward a maqashid-based sustainability framework: CSR and zakat disclosures in Islamic banking

Abstract

The growing adoption of sustainability reporting in Islamic banking has intensified discussions regarding the alignment between sustainability practices and Islamic principles. While conventional sustainability frameworks largely rely on Environmental, Social, and Governance (ESG) indicators, limited attention has been given to how Islamic banks achieve sustainability through Maqashid Shariah-oriented activities, particularly Corporate Social Responsibility (CSR) and zakat programs. This gap raises concerns regarding the adequacy of existing sustainability frameworks in capturing the unique social and spiritual objectives of Islamic banking institutions. This study aims to explore the contribution of CSR and zakat disclosures in sustainability reports to the achievement of Maqashid Shariah and the sustainability of Islamic banks. Specifically, the study seeks to develop a Maqashid-based sustainability framework that integrates social, economic, and ethical dimensions within Islamic banking practices. Using a qualitative research approach, this study employs qualitative content analysis of sustainability reports published by Islamic banks in Indonesia during the period 2021–2025. The findings indicate that CSR and zakat disclosures extend beyond regulatory compliance and philanthropic activities, serving as strategic mechanisms for achieving Maqashid Shariah and strengthening the sustainability orientation of Islamic banks. The analysis reveals that most sustainability initiatives contribute significantly to the protection of wealth, intellect, and life through financial inclusion programs, educational support, community empowerment, healthcare assistance, and micro-enterprise development. Furthermore, the study identifies a strong interconnection between Maqashid achievement and long-term institutional sustainability, encompassing social legitimacy, stakeholder trust, and sustainable value creation.

Keywords: Islamic Banking, Corporate Social Responsibility, Zakat; Maqashid Shariah, Sustainable Finance.