Between Shariah Negative Screening and ESG Positive Screeing: Developing A Conceptual Enhanced Maqasid Al-Shariah Screening Framework

This study explores the conceptual convergence and potential integration between traditional Shariah negative screening and contemporary ESG positive screening methodologies, proposing an enhanced Maqasid al-Shariah-based screening framework. It begins by critically reviewing existing Shariah screening approaches employed in global indices, highlighting significant methodological inconsistencies, limited quantification of Shariah compliance, and insufficient incorporation of broader ethical dimensions. Parallelly, the evolution and criteria of ESG screening are analysed, revealing shared ethical foundations yet differing operational mechanisms. The chapter then articulates the theoretical and practical alignment between Maqasid al-Shariah-Islam's higher objectives encompassing preservation of faith, life, intellect, lineage, and wealth-and ESG principles, underscoring the potential for an integrated ethical framework that bridges the gap between religious compliance and sustainable investment practices. Drawing upon these analyses, the chapter proposes a novel three-phase conceptual model-Shariah Screening 2.0. This model includes: (1) the Shariah Compliancy Score (SCOMS), a quantitative framework refining traditional binary screening by quantifying degrees of compliance; (2) a Shariah-ESG Integrated Rating Model, which combines Shariah compliance scoring with ESG performance metrics; and (3) an Enhanced Maqasid al-Shariah Screening Framework, incorporating comprehensive Maqasid-based indicators through a detailed Corporate Maqasid al-Shariah Assessment (CMSA). The chapter concludes by identifying critical factors for successful implementation, including corporate participation, improved disclosure standards, continued research on specific Maqasid indicators, and robust institutional support, envisioning a practical pathway towards ethically aligned, sustainable investment practices.