Does FinTech Promote or Hinder Climate Action? Evidence from Asian Countries

Abstract

This study examines the effects of FinTech (FIN), institutional quality (IQ), and renewable energy consumption (REC) on climate action (SDG13) in five major Asian economies (China, India, Indonesia, South Korea, and Japan) over the period 2012–2024. Given the growing role of digital finance in sustainable development, the study investigates whether FinTech acts as a driver or a barrier to climate action. The empirical analysis employs the Augmented Mean Group (AMG) estimator, and the findings are validated using the Common Correlated Effects Mean Group (CCEMG) estimator. The results reveal that the impact of FIN on SDG13 is heterogeneous across countries. FIN significantly hinders progress toward SDG13 in China and India, while it promotes SDG13 in South Korea and Japan. No significant effect is found for Indonesia. In contrast, REC consistently enhances climate action across all countries. IQ also exerts a positive and significant effect in all countries except Japan. Overall, the findings suggest that FIN alone is insufficient to advance climate action, its environmental benefits depend on the quality of institutions and the transition toward renewable energy.