Vol. 1 No. 2 (2026): IMANIF: Islamic Economics Management and Finance Journal
Articles

Role of Islamic CSR in Achieving the United Nations Sustainable Development Goals (SDGs): Evidence from Pakistan

Pdf
  • Muhammad Ashraf,
  • Dr.Ammanullah Khattak
Muhammad Ashraf
Gomal university kpk Pakistan
Dr.Ammanullah Khattak
Gomal University

Published 2026-06-17

Keywords

  • Islamic CSR,
  • Sustainable Development Goals,
  • Maqasid al-Shariah,
  • PLS-SEM,
  • Pakistan

Copyright (c) 2026 Muhammad Ashraf, Dr.Ammanullah Khattak (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Despite Islamic social finance's theoretical alignment with the UN 2030 Agenda, empirical evidence linking Islamic CSR practices to Sustainable Development Goal (SDG) outcomes in Muslim majority developing economies remains scarce. This study employs a mixed methods design combining a structured survey of 350 professionals in Shariah compliant Pakistan Stock Exchange listed firms and GRI based content analysis of 90 firms over 540 firm year observations (2018–2023). PLS-SEM via SmartPLS 4.0 was used to test five hypotheses derived from Stakeholder Theory, Legitimacy Theory, and Maqasid al-Shariah. Islamic CSR significantly predicted No Poverty (β = 0.624), Quality Education (β = 0.578), Decent Work (β = 0.589), Gender Equality (β = 0.512), and Environmental Sustainability (β = 0.431). GRI compliance rose from 34.7% (2018) to 58.8% (2023). This study provides the first PLS-SEM validated Islamic CSR SDG framework for Pakistan, offering replicable policy guidance for OIC member states to leverage Islamic social finance as a structured SDG financing mechanism

Pdf

References

  1. AAOIFI. (2010). Governance standard no. 7: Corporate social responsibility conduct and disclosure for Islamic financial institutions. Accounting and Auditing Organisation for Islamic Financial Institutions.
  2. Aguinis, H. (2024). Research methodology: Best practices for rigorous, credible, and impactful research (2nd ed.). Sage.
  3. Akhtar, M. (2024). Waqf-based environmental sustainability: Reforestation and renewable energy applications. International Journal of Islamic Economics, 6(2), 45–62.
  4. Al-Aijaz Research Journal of Islamic Studies & Humanities. (2025). The role of Zakat and Waqf in poverty reduction: An Islamic approach in Pakistan. ARJISH, 5(1), 1–22.
  5. Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423. https://doi.org/10.1037/0033-2909.103.3.411
  6. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58(2), 277–297. https://doi.org/10.2307/2297968
  7. Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(3), 396–402. https://doi.org/10.1177/002224377701400320
  8. Aziz, Y., Mansor, F., Waqar, S., & Zada, N. (2025). Zakat and sustainable development goals (SDGs): Assessing the ripple effect of obligatory-alms spending on education — Empirical evidence from Pakistan. Asian Social Work and Policy Review, 19(1), e70006. https://doi.org/10.1111/aswp.70006
  9. Barclay, D., Higgins, C., & Thompson, R. (1995). The partial least squares (PLS) approach to causal modeling. Technology Studies, 2(2), 285–309.
  10. Basheer, M. F., Hameed, W. U., Al Zarooni, M. I. M. A., Raoof, R., & Sattar, J. (2022). Role of CSR, management practices, and organizational behavior in social equity: A study of the Islamic banking sector of South Punjab. Frontiers in Psychology, 13, Article 926169. https://doi.org/10.3389/fpsyg.2022.926169
  11. Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Lawrence Erlbaum Associates.
  12. Cho, E. (2016). Making reliability reliable: A systematic approach to reliability coefficients. Organizational Research Methods, 19(4), 651–682. https://doi.org/10.1177/1094428116656239
  13. Climate Change Development Report. (2024). Pakistan country climate and development report. World Bank Group.
  14. Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates.
  15. Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage.
  16. Diamantopoulos, A., & Siguaw, J. A. (2006). Formative versus reflective indicators in organisational measure development: A comparison and empirical illustration. British Journal of Management, 17(4), 263–282. https://doi.org/10.1111/j.1467-8551.2006.00500.x
  17. Dirie, K., Sarea, A., & Bin-Nashwan, S. A. (2024). Fragmented regulatory environments and Islamic microfinance contribution to SDGs. Journal of Islamic Banking and Finance, 41(1), 1–15.
  18. Dusuki, A. W., & Abdullah, N. I. (2007). Maqasid al-Shari'ah, Maslahah, and corporate social responsibility. American Journal of Islam and Society, 24(1), 25–45.
  19. Duthler, G., & Dhanesh, G. (2018). The role of corporate social responsibility and internal CSR communication in predicting employee engagement. Public Relations Review, 44(2), 214–227. https://doi.org/10.1016/j.pubrev.2018.03.001
  20. Etikan, I., Musa, S. A., & Alkassim, R. S. (2016). Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1–4. https://doi.org/10.11648/j.ajtas.20160501.11
  21. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
  22. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing.
  23. Fuller, C. M., Simmering, M. J., Atinc, G., Atinc, Y., & Babin, B. J. (2016). Common methods variance detection in business research. Journal of Business Research, 69(8), 3192–3198. https://doi.org/10.1016/j.jbusres.2015.12.008
  24. Geisser, S. (1974). A predictive approach to the random effect model. Biometrika, 61(1), 101–107. https://doi.org/10.1093/biomet/61.1.101
  25. Global Reporting Initiative. (2022). GRI universal standards 2021. https://www.globalreporting.org/standards/
  26. Hair, J. F., Henseler, J., Dijkstra, T., & Sarstedt, M. (2014). Common beliefs and reality about partial least squares: Comments on Rönkkö and Evermann. Organizational Research Methods, 17(2), 182–209. https://doi.org/10.1177/1094428114526928
  27. Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
  28. Hair, J. F., Sarstedt, M., & Ringle, C. M. (2022). Reporting reliability, convergent and discriminant validity with structural equation modeling: A review and best-practice recommendations. Asia Pacific Journal of Management. https://doi.org/10.1007/s10490-023-09871-y
  29. Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
  30. Hidayat, R., & Azka, R. (2024). Zakat-based entrepreneurship and financial independence among beneficiaries. Journal of Islamic Economics and Finance, 10(1), 33–51.
  31. Hoque, N. (2023). Pursuing sustainable development goals through integrating the aspirations of Zakah and CSR. International Journal of Social Economics, 50(9), 1232–1247. https://doi.org/10.1108/IJSE-09-2022-0600
  32. Institute for International Environment and Development. (2010). ISO 26000 international guidance standard on social responsibility. https://www.iied.org/iso-26000-international-guidance-standard-social-responsibility
  33. Institute for Strategic Studies Research and Analysis. (2024). Sustainable development goals and Pakistan. https://issra.pk
  34. IntechOpen. (2024). Global corporate social responsibility: The significance of international guidelines and standards. https://www.intechopen.com/chapters/1176818
  35. International Financial Reporting Standards Foundation. (2025). Pakistan IFRS sustainability disclosure standards profile. https://www.ifrs.org
  36. International Organization for Standardization. (2010). ISO 26000:2010 — Guidance on social responsibility. https://www.iso.org/standard/42546.html
  37. Ismail, H., Saleem, M. A., Zahra, S., Tufail, M. S., & Ali, R. A. (2021). Application of Global Reporting Initiative (GRI) principles for measuring quality of corporate social responsibility (CSR) disclosure: Evidence from Pakistan. Sustainability, 13(20), Article 11409. https://doi.org/10.3390/su132011409
  38. Jan, A., Marimuthu, M., Bin Mohd, M. P., & Isa, M. (2022). Islamic banks and SDG sustainability reporting: Shariah accountability and transparency. Journal of Islamic Accounting and Business Research, 13(4), 580–601. https://doi.org/10.1108/JIABR-05-2021-0135
  39. Kachkar, O., & Alfares, M. (2022). Waqf as a sustainable financing instrument for education. Journal of King Abdulaziz University: Islamic Economics, 35(1), 71–90. https://doi.org/10.4197/Islec.35-1.4
  40. Khan, I., Fujimoto, Y., Uddin, M. J., & Afridi, M. A. (2023). Evaluating sustainability reporting on GRI standards in developing countries: A case of Pakistan. International Journal of Law and Management, 65(3), 189–208. https://doi.org/10.1108/IJLMA-01-2022-0016
  41. Khan, T., & Karim, N. (2010). Islamic principles and corporate social responsibility. Islamic Finance Review, 2(1), 15–28.
  42. Landis, J. R., & Koch, G. G. (1977). The measurement of observer agreement for categorical data. Biometrics, 33(1), 159–174. https://doi.org/10.2307/2529310
  43. Lim, W. M. (2024). Purposive sampling in management research: A review and guidelines. Journal of Applied Structural Equation Modeling, 8(2), 1–18.
  44. Memon, M. A., Ramayah, T., Cheah, J., Ting, H., Chuah, F., & Cham, T. H. (2023). PLS-SEM statistical programs: A review. Journal of Applied Structural Equation Modeling, 7(2), 1–28.
  45. Minhaj-Ud-Din, G., Gul, R. F., Ali, A., & Tariq, M. (2022). Islamic banking, economic growth, and financial stability. Journal of Islamic Banking and Finance, 39(2), 22–39.
  46. Momin, M. (2013). Social and environmental NGOs' perceptions of corporate social disclosures. Accounting Forum, 37(2), 136–158. https://doi.org/10.1016/j.accfor.2012.09.003
  47. Moosa, R. (2023). Corporate social responsibility from an Islamic perspective: An overview. International Journal of Research in Business and Social Science, 12(5), 100–118. https://doi.org/10.20525/ijrbs.v12i5.2564
  48. Nurwahidin, M., Beik, I. S., & Tsabita, K. (2022). Productive Zakat programs and household economic resilience. Journal of Islamic Accounting and Business Research, 13(4), 602–620. https://doi.org/10.1108/JIABR-03-2021-0082
  49. Obaidullah, M. (2020). Zakat, poverty alleviation and the SDGs: A review of evidence and directions. Islamic Economic Studies, 28(1), 1–22. https://doi.org/10.1108/IES-05-2020-0017
  50. Pakistan Bureau of Statistics. (2024). Pakistan social and living standards measurement survey 2019–20. https://www.pbs.gov.pk
  51. Pakistan Gulf Economist. (2025, February 24). Path forward to poverty relief. https://www.pakistangulfeconomist.com
  52. Park, S., & Gupta, S. (2012). Handling endogeneity in marketing research. International Journal of Research in Marketing, 29(2), 186–201. https://doi.org/10.1016/j.ijresmar.2011.09.003
  53. Podsakoff, P. M., Podsakoff, N. P., Williams, L. J., & Rowe, C. A. (2024). Understanding and managing the threat of common method bias. Journal of Service Research, 27(1), 3–29. https://doi.org/10.1177/10946705231195846
  54. Ringle, C. M., Wende, S., & Becker, J. M. (2015). SmartPLS 4. SmartPLS GmbH. https://www.smartpls.com
  55. Rusydiana, A. S. (2020). Islamic finance and sustainable development goals (SDG): A bibliometric review. Journal of Islamic Economics Literatures, 1(1), 1–10.
  56. Saunders, M. N. K., Lewis, P., & Thornhill, A. (2019). Research methods for business students (8th ed.). Pearson Education.
  57. Securities and Exchange Commission of Pakistan. (2024). Phased implementation of IFRS S1 and S2. https://www.secp.gov.pk
  58. Sekaran, U., & Bougie, R. (2020). Research methods for business: A skill-building approach (8th ed.). Wiley.
  59. State Bank of Pakistan. (2024). Islamic banking bulletin. https://www.sbp.org.pk
  60. Stone, M. (1974). Cross-validatory choice and assessment of statistical predictions. Journal of the Royal Statistical Society, Series B, 36(2), 111–147. https://doi.org/10.1111/j.2517-6161.1974.tb00994.x
  61. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610. https://doi.org/10.2307/258788
  62. Tok, E., Khalid, K., & Isik, C. (2023). Integrating Islamic social finance with the United Nations sustainable development goals through Maqasid al-Shariah principles. International Journal of Academic Research in Business and Social Sciences, 15(7). https://doi.org/10.6007/IJARBSS
  63. United Nations Development Programme. (2020). Zakat for the SDGs. https://www.undp.org/blog/zakat-sdgs
  64. United Nations General Assembly. (2015). Transforming our world: The 2030 agenda for sustainable development (Resolution A/RES/70/1). United Nations.
  65. United Nations Global Compact. (2024). About the UN Global Compact. https://unglobalcompact.org
  66. Veredas do Direito. (2026). Zakat as an Islamic social finance instrument for achieving the sustainable development goals: A PRISMA-based systematic review and meta-analysis on poverty reduction and social empowerment. Revista Dom Helder. https://doi.org/10.5824/veredas
  67. Williams, G., & Zinkin, J. (2010). Islam and CSR: A study of the compatibility between the tenets of Islam and the UN Global Compact. Journal of Business Ethics, 91(4), 519–533. https://doi.org/10.1007/s10551-009-0097-x
  68. World Economic Forum. (2023). Global gender gap report 2023. https://www.weforum.org
  69. Yasmin, K., Yasmin, K., & Al Abri, S. (2024). Islamic framework for sustainable development. International Journal of Islamic Finance and Sustainable Development, 16(4), 136–160.
  70. YVEA. (2023). ISO 26000 standard: Corporate social responsibility standard. https://www.yvea.io/en/services/certifications-goods/iso-26000-standard