Introduction

This chapter lays the groundwork for a book investigating Shari’a-compliant equity investments and the methodologies used to screen for them. The book delves into the impressive growth of Shari’a-compliant investments, particularly within the Islamic banking and finance (IBF) industry. It highlights the crucial role of Shari’a screening methodologies in ensuring investments comply with Islamic religious principles. The chapter outlines the book's two primary aims: (1) to explore and analyse the history and current practices of Shari’a screening methodologies, and (2) to contemplate how these methodologies can be enhanced to incorporate the advancements within the IBF industry. It details the research objectives, which include a review of the history and existing practices of Shari’a screening methodologies, along with an exploration of how they can be improved to address criticisms in the literature and integrate with the evolving IBF landscape. The chapter also formulates research questions that guide the book's investigation, focusing on the origins and rationale behind screening methodologies, potential revisions and the possibility of dynamic thresholds based on IBF development. The chapter emphasises the significance of this research. Despite the significant growth of Shari’a-compliant investments, academic literature on Shari’a screening methodologies remains limited, particularly regarding empirical analysis of their development and potential for improvement. This book aims to address this gap by offering fresh insights from interviews with founding Shari’a board members and IBF experts, along with exploratory research using secondary data. Finally, the chapter provides a roadmap for the book, outlining the content of each subsequent chapter.