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Abstract: One of the legal framework approach under the concept of sustainable development is the precautionary principle . The precautionary principle plays an important role in the area of environmental law and governance. The used of the precautionary principle in the area of environmental law and governance is largely in respond to the inevitability of every human being around the globe to protect environment from being polluted in their surroundings. As for the Islamic banking is concerned, the bank may created an essential mechanism to achieve sustainable development. Therefore, this study examines the use of the precautionary principle in Islamic banking with relation to the environmental law and governance by identifying actions and cases which deal with environmental protection. This study is also identifying the relation between the Islamic banking which applied the precautionary principle and Rio declaration as a means to protect mother nature.