Bridging ESG and FinTech: A Technological Approach to Carbon Performance

We examine the association between ESG disclosure, FinTech adoption, and carbon performance in firms operating in energy-intensive industries within BRICS countries. Drawing on multiple theoretical frameworks, our empirical models employ firm fixed-effects estimators to analyze an unbalanced panel dataset comprising 2226 firm-year observations spanning 14 years. Our findings are three-fold. First, our primary evidence reveals that both ESG disclosure and FinTech adoption have a statistically significant positive relationship with carbon performance. Second, we provide robust evidence that FinTech enhances the effectiveness of ESG disclosure by improving transparency, reducing information asymmetry, and facilitating access to green financial resources. Third, we find that carbon tax policies moderate these relationships, with firms in high-regulation environments experiencing stronger positive effects. Overall, our results suggest that FinTech acts as an enabler, amplifying the impact of ESG practices on corporate carbon performance. Our findings are robust to various control mechanisms, alternative measures, and potential endogeneities. These results have implications for policymakers and corporate decision-makers seeking to integrate FinTech into ESG frameworks, as well as for advancing country-specific and regional approaches to climate change mitigation.