Mediating Role of Islamic Financial Performance Index in the Islamic Corporate Governance’s Impact on Sustainability Performance of Islamic Commercial Banks

The increased competition in the Sharia banking industry requires Islamic Commercial Banks (ICB) to strengthen their Sustainability performance. Previous research tested the Islamic Corporate Governance (ICG) factor as an antecedent that is relevant to the Sustainability Performance (SP) of Islamic entities. In practice, the effect of ICG on SP still opens research opportunities due to the finding’s inconsistency. The implementation of a sustainability strategy, however, requires adequate resources, so that the Islamicity Financial Performance Index (IFPI) factor is also involved as a mediating variable in this study. This factor is part of the novelty in the issue of the relationship between ICG and SP today. Explanatory techniques with quantitative methods are used in this study to achieve the research objectives, namely, to analyze the role of ICG on the SP of Islamic Commercial Banks in Indonesia by the IFPI mediation. This study is expected to contribute to the enrichment of the literature on sustainability issues and to become a reference for stakeholders in improving the SP of ICB.