COMPARATIVE ANALYSIS OF GREEN SUKUK AND CONVENTIONAL GREEN BONDS EXPLORING SYNERGIES AND DISTINCTIONS IN SUSTAINABLE FINANCE IN NIGERIA Section Articles

Abstract

This study explores and compares the roles of Green Sukuk and conventional green bonds in promoting climate-resilient development and sustainable finance in Nigeria. Guided by stakeholder theory, the study adopts a conceptual research approach based on secondary data drawn from peer-reviewed journal articles, institutional reports, and policy documents published between 2020 and 2025. Relevant literature was systematically reviewed using databases including Scopus, Web of Science, SSRN, and Google Scholar. A thematic synthesis approach was then used to identify and examine recurring themes relating to environmental impact, investor confidence, market acceptance, and policy frameworks.
The findings indicate that both Green Sukuk and conventional green bonds are valuable financing instruments for supporting projects that enhance climate resilience and environmental sustainability. However, Green Sukuk offer a distinct advantage by integrating Shariah-compliant investment principles with sustainability goals. This dual focus enables them to attract both conventional and faith-based investors, thereby expanding the investor base and promoting greater financial inclusion. Furthermore, the ethical screening and certification processes associated with Green Sukuk improve transparency, strengthen investor trust, and enhance market credibility, contributing to their growing acceptance. The study concludes that Green Sukuk and conventional green bonds should be regarded as complementary rather than competing instruments for sustainable financing. When used together, they can provide a more inclusive, resilient, and effective financing framework for advancing Nigeria's sustainable development objectives. To maximize their potential, the study recommends the development of a national green taxonomy, strengthened certification standards, and more robust regulatory frameworks to enhance transparency, accountability, and investor confidence. Finally, it proposes a conceptual model demonstrating how certification, institutional credibility, and supportive policy frameworks work together to build investor confidence and encourage the wider adoption of green financial instruments in Nigeria.