Fiduciary Governance of Waqf for Climate Adaptation Financing in Malaysia: A Legal Framework for Sustainable Development

In Muslim majority jurisdictions, there is a greater need for legally secure, morally sound and community-based funding mechanisms, given the challenges of climate change. Waqf in Malaysia has great potential to invest in long-term assets to support adaptation to climate change, including adapting community facilities to be resilient to climate change, installing solar-powered water systems, establishing sustainable agricultural facilities, protecting nature, and developing climate-resilient waqf land. However, the governance of waqf is predominantly based on law, is institutionally fragmented, and is only remotely related to climate finance standards. This article critically analyses the current waqf governance system and sustainable finance mechanisms in Malaysia, and their sufficiency for mobilising waqf for climate adaptation financing. This article compares the position of State Islamic Religious Councils as sole trustees, Malaysian sustainable finance instruments (MSFI) like Climate Change and Principle-based Taxonomy and Sustainable and Responsible Investment Sukuk Framework (SRI Sukuk Framework), and recent Islamic social finance literature (ISFL) on climate resilience; all of this is done using a doctrinal legal method and critical policy analysis. It posits that the primary problem is not the lack of flexibility in the Shariah, since the existing materials and green waqf models can facilitate the development of waqf assets in line with social benefit. Instead, the core issue is a lack of a dispositional waqf framework to operationalise the fiduciary functions and obligations of waqf trustees – including alignment with climate change, prudence, environmental due diligence, transparency and impact reporting, and beneficiary participation. The article proposes a concentrated legal model to drive waqf-based financing for climate adaptation in Malaysia, including coordinated national guidelines, statutory adoption at the state level, Shariah and climate impact audits, and integration with the Islamic capital market. The conclusion is that if waqf can be used as an effective mechanism to achieve sustainable development, its governance system should be beyond the traditional religious system. It must transform itself into a Fiduciary Public-Benefit Institution, with clearly measurable, climate-smart aspirations and accountability mechanisms.

waqf; climate adaptation finance; Islamic law; fiduciary duties; State Islamic Religious Councils

1. Abu-Rayash, A., & Sabbah, E. (2023). Analysis Of Environmental Sustainability In The Holy Quran: Maqasid Framework. J. Contemp. Maqasid Stud, 2(1), 61–94. [Google Scholar] [Crossref]

2. Al-Ghazālī, M. ibn M. (1413). Al-Mustaṣfā (Jil. 1). Dār al-Kutub al-ʿIlmiyyah. https://shamela.ws/book/5459 [Google Scholar] [Crossref]

3. Badan Wakaf Indonesia. (2022, September). Green Waqf Framework. Badan Wakaf Indonesia. [Google Scholar] [Crossref]

4. Baharudin, M. H. (2022). A Framework for Financial Feasibility Study of Housing Project Development on Waqf Land in Malaysia with reference to Tawzi’ al-Manfa’ah [PhD Thesis]. International Islamic University Malaysia (IIUM). [Google Scholar] [Crossref]

5. Baharudin, M. H., & Yusoff, R. M. (2025). Waqf in Johor: A systematic literature review of governance, legal framework, economic sustainability, and development. Journal of Business, Finance, and Banking, 1(1), 82–96. [Google Scholar] [Crossref]

6. Bank Negara Malaysia. (2021, April 30). Climate Change and Principle-based Taxonomy. Bank Negara Malaysia. https://www.bnm.gov.my/-/climate-change-principle-based-taxonomy [Google Scholar] [Crossref]

7. Hassan, M. A. M., Alias, A., Mahamood, S. M., & Costa, F. D. (2021). Waqf Land Development Approaches And Practices In The State Islamic Religious Councils. PLANNING MALAYSIA, 19. https://doi.org/10.21837/pm.v19i17.1009 [Google Scholar] [Crossref]

8. Hussin, R. (2021). An Overview of The Regulatory Framework for Waqf Implementation in Higher Educational Institutions In Malaysia. Journal of Legal, Ethical and Regulatory Issues, 24(1S), 1–5. [Google Scholar] [Crossref]

9. International Bank for Reconstruction and Development. (2026). Turning Vision into Action: Advancing the Implementation of Climate Strategies Through Effective Institutions (hlm. 123). World Bank. https://documents1.worldbank.org/curated/en/099021126085527314/pdf/P512756-1e8a471d-dba0-46b1-a0b7-584bbd9ff8be.pdf [Google Scholar] [Crossref]

10. Ismail, C. Z., Salim, N. J., & Hanafiah, N. J. A. (2015). Administration and Management of Waqf Land in Malaysia: Issues and Solutions. Mediterranean Journal of Social Sciences, 6(4), 613–620. https://doi.org/10.5901/mjss.2015.v6n4s2p613 [Google Scholar] [Crossref]

11. JAWHAR. (2021). Collection of Fatwa on Waqf. JAWHAR. https://www.jawhar.gov.my/wp-content/uploads/2021/12/COLLECTION-OF-FATWA-ON-WAQF.pdf [Google Scholar] [Crossref]

12. Kader, S. Z. S. A., Baharudin, M. H., binti Mustafa, M., & Yusoff, R. M. (2025). Waqf As a Sustainable Solution: Addressing Climate Change Impacts on Real Estate Through Perpetual Endowment and Community Benefit. Journal of International Conference Proceedings, 7(3), 695–709. https://elibrary.ru/item.asp?id=81402716 [Google Scholar] [Crossref]

13. Kader, S. Z. S. A., Baharudin, M. H., Mustafa, M., Yusoff, R. M., Manaf, Z. I. A., & Djafri, F. (2024). Waqf As a Sustainable Solution: Addressing Climate Change Impacts on Real Estate Through Perpetual Endowment and Community Benefit. Journal of International Conference Proceedings, 7(3), 695–709. https://doi.org/10.32535/JICP.V7I3.3724 [Google Scholar] [Crossref]

14. Korkut, C. (2025). Waqf and Zakat as Drivers of Community-Based Climate Resilience in the Net Zero Transition. Discover Global Society, 3(1), 178. https://doi.org/10.1007/s44282-025-00333-y [Google Scholar] [Crossref]

15. Mustaffa, J., Isa, M. Y. B. M., & Mohammed, Z. (2022). Governance Structures: Dependability And Efficiency Of The Waqf Institutional System In Malaysia. Journal of Economics and Business Aseanomics, 7(2), 058–070. https://doi.org/10.33476/jeba.v7i2.3415 [Google Scholar] [Crossref]

16. Securities Commission Malaysia. (2019). Sustainable and Responsible Investment Sukuk Framework—An Overview. https://www.sc.com.my/api/documentms/download.ashx?id=84491531-2b7e-4362-bafb-83bb33b07416 [Google Scholar] [Crossref]

17. World Bank. (2025). Islamic Finance and Climate Agenda: From Green Sukuk Innovation to Greener Halal Value Chains. World Bank. https://doi.org/https://doi.org/10.1596/43986 [Google Scholar] [Crossref]

• Data Integration in Malaysian Syariah Courts: A Study of Challenges and Solutions
• The Concept of Family Well-Being from the Perspectives of Islam, Western Thought and Malaysia Madani
• Leveraging AI Tools for Islamic Scholarship: Podcast and eBook Innovations in Teaching the Sunni Intellectual Tradition
• Cryptocurrency and Shariah: Analyzing the Implications of Islamic Jurisprudence on Bitcoin and its Ethical Framework
• Islamic Credit Card and its Value-Based Proposition: A Perspective from Maqasid Al-Shariah