Implementing hifz al-bi’ah in central bank environmental policies

Background: Climate change has become increasingly relevant to financial-system stability because physical and transition risks can affect asset quality, repayment capacity, and the allocation of financial resources. Within Islamic economics, hifz al-bi’ah provides an ethical perspective on environmental preservation as a dimension of maqashid al-shariah. This study examines how hifz al-bi’ah can conceptually inform environmental and macroprudential policies in Indonesia. Methods: A qualitative literature-based approach was employed to analyze 46 sources, comprising 40 scholarly articles published between 2020 and 2025, three regulatory or official policy documents, and three primary Islamic sources. The analysis involved source screening, thematic coding, comparative synthesis, and conceptual mapping of hifz al-bi’ah, sustainable finance, and central-bank policy instruments. Findings: The analysis indicates that selected Bank Indonesia instruments, including environmentally oriented LTV/FTV and down-payment policies, the Macroprudential Inclusive Financing Ratio, and the Macroprudential Liquidity Incentive Policy, can be conceptually interpreted as mechanisms that provide financial incentives consistent with environmental preservation. However, these instruments were not originally formulated explicitly on the basis of hifz al-bi’ah or maqashid al-shariah. Further policy development may incorporate environmental-risk assessment, financed-emissions disclosure, and green-taxonomy coordination, subject to statutory mandates and empirical evaluation. Conclusion: Hifz al-bi’ah offers a normative framework for connecting Islamic environmental ethics with sustainable central banking and macroprudential policy. The findings support conceptual alignment rather than a claim that Bank Indonesia has formally adopted maqashid al-shariah as a policy foundation. Novelty/Originality of this article: This study develops a conceptual mapping between hifz al-bi’ah, sustainable finance, and Indonesian central-bank instruments, providing an Islamic normative perspective for understanding the environmental dimension of macroprudential policy without conflating normative principles with formal policy mandates.