Bank Islam’s ISIA 3.0 Redefines Investment, Profits With Purpose

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, July 1 (Bernama) -- Bank Islam Malaysia Bhd has launched the Ihsan Sustainability Investment Account (ISIA) 3.0, the third version of its pioneering Shariah-compliant investment offering.

Designed to deliver competitive returns, ISIA 3.0 channels funds toward measurable social and environmental impact.

It forms a core part of Bank Islam’s sustainability strategy, contributing directly to the bank’s value-based intermediation (VBI) agenda.

Structured under Wakalah Bil Istithmar, it aligns with Shariah principles and supports key sustainability agenda, including the United Nations Sustainable Development Goals (UN SDGs), Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy (CCPT), and Islamic social finance via platforms such as Zakat and Sadaqa House Bank Islam.

Since its introduction to the market, the ISIA series has attracted strong investor interest, raising RM1.8 billion through ISIA 1.0 and 2.0, reflecting growing demand for purpose-driven financial solutions grounded in Islamic values.

ISIA 3.0 is the third iteration of this flagship impact investment initiative and remains Malaysia’s first investment account specifically structured to channel capital into environmental, social and governance (ESG) and UN SDG-aligned financing while promoting Islamic social finance.

Bank Islam group chief business officer for institutional banking Sharifah Sarah Syed Mohamed Tahir said ISIA 3.0 reinforces the bank’s commitment to VBI by enabling participation in projects that uplift underserved communities, support low-carbon development, and promote economic inclusion.

“Through ISIA, investors gain a tangible stake in driving real-world impact while earning potential returns in line with their values,” she told Bernama.

ISIA 3.0 is open for subscription from June 26 to July 28, 2025, with the investment period commencing on July 29, 2025.

ISIA 3.0: Enhanced transparency and broader participation

She added that a key distinction of ISIA 3.0 is its structured impact reporting, which empowers investors with visibility into where and how their capital is deployed, ensuring both Shariah compliance and measurable, purposeful outcomes.

“ISIA is not just about returns -- it is about enabling capital to deliver real-world impact,” Sharifah Sarah said.

The fund’s financing-based structure allows Bank Islam to scale its impact efforts without burdening its capital base.

This opens the door to broader participation in ESG-aligned investing with both sustainability and Islamic values.

Supporting ESG transitions across industries

She noted that ISIA is particularly well-suited for organisations facing increasing pressure to align with ESG standards amid growing regulatory and market expectations, as well as investors who prefer long-term investments with sufficient excess liquidity, as the investment is locked in until maturity with no early withdrawals permitted.

“The incentive lies in the need to go green, not only for large corporations but also mid-tier suppliers, who are now motivated to green their supply chains.

“Through ISIA, we are not only providing access to funding but also encouraging and accelerating their transition towards more sustainable practices,” she said.

Future outlook: Scaling Islamic sustainable finance

Looking ahead, Sharifah Sarah said Bank Islam envisions the Islamic finance sector evolving through a steadfast commitment to sustainability and a stronger focus on financial inclusion.

“Institutions that act early to embed ESG across their business will be best placed to lead and capture emerging opportunities,” she said.

As of December 2024, Bank Islam has achieved 93 per cent of its revised RM28 billion sustainable finance target for the financial year 2025, reflecting strong traction in supporting Malaysia’s green economy.

The bank anticipates continued momentum in areas such as green sukuk, sustainability-linked financing, and impact investing across key sectors including renewable energy, sustainable agriculture, affordable housing, and waste management.

-- BERNAMA