Green finance effectiveness under policy uncertainty: an integrated conceptual framework linking governance, FinTech, and artificial intelligence to corporate environmental performance

Green finance has emerged as a critical mechanism for supporting sustainable investment and improving corporate environmental performance (CEP); however, its effectiveness remains highly uneven across firms, industries, and institutional environments. Existing literature has largely examined green finance through fragmented and predominantly linear perspectives, providing limited understanding of how policy uncertainty, governance quality, institutional conditions, and technological capability jointly shape sustainability outcomes. To address this gap, this study develops the Adaptive Green Finance Effectiveness Theory (AGFET), an integrative and context-dependent theoretical framework explaining the conditional effectiveness of green finance under varying macroeconomic, institutional, organisational, and technological conditions. Drawing upon Institutional Theory, Stakeholder Theory, the Resource-Based View, and investment-under-uncertainty perspectives, AGFET conceptualises green finance effectiveness as an adaptive and nonlinear process mediated through green innovation, environmental investment, ESG practices, and technological transformation. The framework further incorporates the emerging roles of FinTech innovation and artificial intelligence (AI) in enhancing sustainability-related decision-making, predictive analytics, and environmental performance evaluation. The study contributes to sustainable finance literature by advancing a unified multi-level framework that integrates financial, governance, institutional, and technological dimensions into a coherent theoretical structure. In addition to clarifying the conditions under which green finance translates into improved environmental outcomes, AGFET provides a scalable foundation for future empirical, comparative, and AI-driven sustainability research. The findings offer important implications for policymakers, firms, and financial institutions seeking to improve the effectiveness of green finance in supporting climate transition and sustainable development objectives.