Since the beginning of the financial crisis in 2008, Islamic finance has been subject to a number of intriguing debates. While evidence suggests that Islamic private banks got through the imponderabilities of the financial crisis more easily than conventional banks, Islamic finance has been criticized by some as incapable of performing the functions of modern banking. Moreover, there has been a debate among academics as well as among practitioners whether Islamic finance indeed represents a new faith-based form of banking or whether it represents just a conventional way of banking that is based on the use of religious terminology. Against this background, we examine to what extend the disclosed information of Islamic private banks meet the constitutive criteria of the Islamic normative foundations. Based on literature of Islamic thought we derived a coding scheme with 21 items and selected a sample of 18 Islamic private banks. We analyzed the content of the selected banks’ annual reports and benchmarked the disclosure performance against Islam-based requirements. The results show that, concerning the disclosed content, few banks fully adhere to the normative standards of Islamic thought on economics as described in theoretical books on Islamic finance. Addressing this gap between theory and practice, we discuss the possibility of what we suggest to call ‘greenwashing in Islamic finance’ as an ethical challenge. Elaborating on this, we discuss the prospect of introducing more transparent disclosure standards such as an Islamic Finance Reporting Initiative inspired by the key performance indicators system of the Global Reporting Initiative (GRI) for non-financial reporting.