By : Khawar Nehal

12 September 2024

In Islam, the purpose of a business, according to the Qur'an and God's commandments, goes beyond mere profit generation. It revolves around fulfilling the divine trust (Amanah) that humans hold in their stewardship over resources, seeking lawful sustenance (Halal Rizq), and contributing to social welfare and justice. Several key concepts in the Qur'an and Islamic teachings provide a framework for understanding how business activities should be aligned with God’s will:

Islam considers all resources as a trust from God, and human beings are accountable for how they use them. This accountability extends to business practices, where the focus is not just on material success but on ethical behavior, fairness, and transparency.

• Surah Al-Baqarah (2:286): “God does not burden a soul beyond that it can bear… Each will have what it has earned, and it will bear [the consequences of] what it has done.”
  • This verse emphasizes accountability, and in a business context, it means that individuals and corporations are responsible for their actions, including financial and ethical responsibilities.

• Surah An-Nisa (4:58): “Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice.”
  • Business dealings should be based on fairness and trust, ensuring that the rights of all stakeholders, including shareholders, employees, customers, and society, are safeguarded.

Islam places great emphasis on seeking wealth in a lawful manner and avoiding unethical practices such as exploitation, fraud, and interest (Riba). The Qur'an encourages believers to engage in trade and commerce but warns against injustice and dishonesty.

• Surah Al-Baqarah (2:275): “Allah has permitted trade and has forbidden interest.”
  • This distinction suggests that business should focus on just and lawful earnings, and profits should not come at the expense of others’ well-being.

• Surah Al-Mutaffifin (83:1-3): “Woe to those who give less [than due], who, when they take a measure from people, take in full, but if they give by measure or by weight to them, they cause loss.”
  • Business activities should be conducted with honesty, ensuring fair exchange and no exploitation, a principle closely tied to modern ideas of ethical sourcing and corporate responsibility.

Islam encourages the equitable distribution of wealth and emphasizes the responsibility businesses have toward the well-being of society. Charity (Sadaqah) and social responsibility (Maslahah) are integral to Islamic business ethics.

• Surah Al-Hashr (59:7): “…so that it [wealth] may not merely make a circuit between the wealthy among you.”
  • This verse promotes a balanced and just economic system where wealth should circulate widely, benefiting all sectors of society, not just the wealthy elite.

• Surah Al-Baqarah (2:177): “It is not righteousness that you turn your faces toward the east or the west, but [true] righteousness is in one who believes in Allah… and gives his wealth, in spite of love for it, to relatives, orphans, the needy, the traveler, those who ask [for help], and for freeing slaves.”
  • Businesses are encouraged to contribute to social welfare, supporting those in need, which aligns with modern Corporate Social Responsibility (CSR) initiatives aimed at benefiting society.

In modern business, shareholder value refers to maximizing returns for shareholders. From an Islamic perspective, shareholder value must be balanced with ethical obligations and social justice. Wealth generation should be aligned with God’s principles of fairness, honesty, and contribution to society. The focus should be on long-term sustainability, not short-term profit maximization.

• Shareholder wealth is permissible as long as it is pursued through Halal means and does not lead to harm or exploitation of others.

ESG principles align closely with Islamic teachings that advocate for stewardship (Khilafah) of the earth, fairness, and justice in dealings, and good governance. Islamic principles encourage the responsible use of resources and taking care of the environment.

• Surah Al-A'raf (7:31): “O children of Adam, take your adornment at every masjid, and eat and drink, but be not excessive. Indeed, He likes not those who commit excess.”
  • This verse advocates for moderation and sustainability, reflecting modern concerns around environmental degradation and responsible consumption.

• Surah Al-An'am (6:141): “And do not waste [resources], for indeed, He does not like the wasteful.”
  • Businesses are expected to avoid wastefulness, linking directly to the modern focus on environmental stewardship in ESG practices.

CSR is rooted in the Islamic concept of Maslahah (public interest). Islam promotes a strong sense of responsibility towards society, encouraging businesses to contribute positively to community development and societal well-being.

• Zakat (charitable giving) and Sadaqah (voluntary charity) are Islamic pillars that compel individuals and businesses to contribute to societal welfare. This concept mirrors CSR, where companies are expected to reinvest in the community, support the underprivileged, and foster social equity.

• Surah Al-Baqarah (2:261): “The example of those who spend their wealth in the way of Allah is like a seed of grain that sprouts seven ears; in every ear, there are a hundred grains.”
  • This verse encourages giving and social responsibility, highlighting how charitable acts multiply rewards in this world and the hereafter.

In essence, business according to God’s rules, as outlined in the Qur'an, should operate on principles of trust, fairness, accountability, lawful earnings, and social responsibility. Concepts like shareholder value, ESG, and CSR can be understood through this Islamic ethical lens, where the focus is not solely on profit but on promoting justice, welfare, and environmental sustainability, while maintaining a deep sense of accountability to God.