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EXPLORING THE ROLE OF DIGITAL AND GREEN FINANCE IN DRIVING ENVIRONMENTALLY SUSTAINABLE GROWTH THROUGH INNOVATIVE SOLUTIONS

Pages: 43-55
DOI: 10.70102/PS/V9/04

Abstract

The international movement toward ecological conservation requires a
paradigm change in the allocation of capital, making the synergy between digital and green
finance a key contributor to the growth of an environmentally friendly nature. This study
examines the role of Fintech and digital transformation integration in supporting the
realization of Sustainable Development Goals (SDGs) by filling the gap between innovative
financing and the adoption of green technologies. This study provides a transformative impact
of digital inclusive finance on carbon neutrality and energy efficiency using a multi-sectoral
analysis. The most critical statistical findings described in the literature are that the digital
transformation serves as a strong moderator; in particular, implementing the functions of
digital finance can lead to greater green innovation in the firm at the level of 15-25% under
the condition of favorable environmental regulations. Moreover, according to empirical
evidence, Fintech adoption in the banking industry could enhance the sustainability
performance by minimizing the information asymmetry by almost 25%, therefore, decreasing
the price of green credit. The research approach uses an abstract construct, which connects
financial innovation and resource-based economic development, showing the importance of
digital tools in reducing CO2 emissions. It has been shown that a 1% rise in digital financial
inclusion is associated with an observable increase in energy efficiency in developed and
resource-based economies. This study concludes that a harmonized digital-green financial
ecosystem is the key to resilient economic development. The results reveal a strategic plan to
be followed by policy-makers to use Fintech as an environmental innovation booster so that digital expansion goes in line with the international climate objectives through the clear and
compelling financial answers.

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