Green fintech adoption and ESG performance: Evidence from Indian listed firms

This study examines how the adoption of green financial technology (fintech) influences the environmental, social, and governance (ESG) performance of publicly listed companies in India. We adopt a firm-level Green Fintech Adoption Score (GFAS) and make a panel dataset of 96 major Indian firms over 2014–2023. Using descriptive statistics and visualizations, we document trends and patterns in GFAS and ESG scores. We then estimate panel regression models (pooled Ordinary Least Squares (OLS), fixed effects, random effects) and a system GMM (Generalized Method of Moments) specification to evaluate the impact of GFAS on ESG, controlling for firm characteristics such as profitability, asset turnover, and Tobin's Q. Our key finding is that greater green fintech adoption is associated with significantly higher ESG performance. In our preferred specification (fixed effects), GFAS has a positive and significant effect on ESG. This finding is consistent with our theoretical framework, which interprets the green fintech–ESG relationship through financing efficiency, information transparency, and operational efficiency channels, without directly testing these mechanisms empirically. While system GMM estimates are directionally consistent with our primary findings, the established impact is most robustly observed across our OLS, fixed effects, and instrumental variable estimations. The findings imply that policy efforts to promote digital green finance can measurably enhance corporate sustainability outcomes. Although the empirical analysis is based on Indian listed firms, the institutional setting and digital finance environment examined in this study reflect conditions common across many emerging economies, supporting broader relevance of the underlying mechanisms identified.