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Meeting Economic, Environmental, Social and Governance Compliance Through Zakat: Its Challenges and Way Forward for Malaysian Listed Companies

Author

Listed:
  • A’ieshah Abdullah Sani

    (Faculty of Accountancy, Universiti Teknologi MARA, KM26, Jalan Lendu, 78000 Alor Gajah, Melaka)

  • Siti Azrina Adanan

    (Faculty of Accountancy, Universiti Teknologi MARA, KM26, Jalan Lendu, 78000 Alor Gajah, Melaka)

  • Amilia Saidin

    (Faculty of Accountancy, Universiti Teknologi MARA, KM26, Jalan Lendu, 78000 Alor Gajah, Melaka)

  • Khair Syakira Bustamam

    (Faculty of Accountancy, Universiti Teknologi MARA, KM26, Jalan Lendu, 78000 Alor Gajah, Melaka)

  • Khairunnisa Abd Samad

    (Faculty of Business and Management, Universiti Teknologi MARA, KM26, Jalan Lendu, 78000 Alor Gajah, Melaka)

Abstract

Zakat, as one of five Islam pillars, is a compulsory act of almsgiving for wealth redistribution, poverty reduction, and social welfare promotion. Although classically considered a religious obligation, zakat is being increasingly conceptualized in sustainability and good governance terms. At the same time, Economic, Environmental, Social, and Governance (EESG) framework have gained global traction as the key driver of moral and sustainable business. There are several discussion  explained that the practice of zakat can be mapped strategically onto EESG principles, particularly the "Social" and "Governance" dimensions, by its advocacy of social justice, transparency, and accountability of institutions. Following a literature-based review methodology, this study distills evidence from past studies related to Zakat practice in enhancing EESG compliance. This paper explores several challenges, ranging from limited standardized zakat- EESG framework in terms of performance metrics and weak regulatory oversight. Despite these challenges, this paper concludes that Zakat holds high potential as a faith-based institution for promoting sustainable development and responsible governance. Some of way forwards to enhance the compliance of zakat in EESG framework through developing an integrated Zakat-EESG reporting standards particularly for Malaysian listed companies and encouraging regulatory reforms as a driver to contribute  zakat towards modern sustainability frameworks.

Suggested Citation

  • A’ieshah Abdullah Sani & Siti Azrina Adanan & Amilia Saidin & Khair Syakira Bustamam & Khairunnisa Abd Samad, 2025. "Meeting Economic, Environmental, Social and Governance Compliance Through Zakat: Its Challenges and Way Forward for Malaysian Listed Companies," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 2499-2506, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:2499-2506
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    References listed on IDEAS

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    1. Roszaini Haniffa & Mohammad Hudaib, 2007. "Exploring the Ethical Identity of Islamic Banks via Communication in Annual Reports," Journal of Business Ethics, Springer, vol. 76(1), pages 97-116, November.
    2. Noorfazreen Mohd Aris & Nurul Fadly Habidin & Abdul Qayuum Abdul Razak & Muhammad Faidz Mohd Fadzil, 2025. "Zakat Distribution in Improving the Well-being of Asnaf: A Conceptual Review," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 3483-3494, June.
    3. Nazamul Hoque & Mahi Uddin & Mohammad Tazul Islam & Abdullahil Mamun & Mohammad Nazim Uddin & Afzal Ahmad & Md Thowhidul Islam, 2023. "Pursuing sustainable development goals through integrating the aspirations ofzakahand CSR: evidence from the perspective of an emerging economy," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 50(9), pages 1232-1247, March.
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