Green FinTech: catalysing global sustainability through digital innovation

As the world races to tackle climate change and build a more inclusive economy, a new force is rising at the intersection of technology and sustainability called Green Fintech. This fast-growing sector is transforming the way money flows, carbon footprints are tracked, and investment decisions made. The ultimately aim of Green Fintech is to drive environmental and social progress. From mobile apps that reward sustainable behaviour to blockchain-powered carbon market, Green Fintech is no longer a fringe concept. It is becoming a global imperative.

Green Fintech refers to financial technology solutions that intentionally promote sustainable goals. It integrates Environmental, Social, and Governance (ESG) principles into financial services using innovations like blockchain, AI, and digital platforms. According to the UK Centre for Green Finance & Investment, green fintech includes products like green loans, ESG-focused robo-advisors, and automated carbon tracking in financial transactions. 

Now the question is-- why this is the best time for green finance. 

The timing couldn't be more urgent than now. The United Nations (2023) has warned that without immediate reductions in global greenhouse gas emissions; the planet is likely to exceed the 1.5°C warming threshold by 2035 which is an irreversible tipping point for climate change.

Green Fintech addresses this urgency by mobilising private capital on a large scale. Tools like green crowd-funding platforms and ESG investment apps help channel funds into renewable energy, sustainable agriculture, and climate-resilient infrastructure. These platforms are democratising finance empowering everyday citizens, not just institutions to make climate-conscious financial decisions.

The sector also responds to growing demands for transparency and accountability. Investors, regulators, and consumers are pushing back against greenwashing which is false or exaggerated environmental claims. Green Fintech combats this through ESG audits, real-time impact tracking, and blockchain-verified green disclosures (FSCA, 2024).

Considering these powering financial inclusion and innovation is a burning issue now.

Green Fintech doesn't just support the planet; it also supports people. According to the World Economic Forum (2024), 45 per cent of Green Fintech solutions target climate ventures, while 38 per cent focus on social impact initiatives. Green Insurtech products are emerging to be insured against extreme weather events and climate-affected agriculture.

Meanwhile, digital ESG analytics tools use AI to provide green credit scoring and personalised sustainability insights, offering financial inclusion and risk mitigation for underserved communities.

In Southeast Asia, the adoption is accelerating. Singapore has pledged to issue up to SGD 35 billion in green bonds by 2030. Malaysia is promoting climate-friendly finance through its Sustainable and Responsible Investment (SRI) Sukuk framework (UOB, PwC & SFA, 2024). Bangladesh also has a good opportunity here. 

But the way is not easy. Challenges are there. Despite its promise, the Green Fintech movement faces barriers. Greenwashing remains a concern, along with fragmented ESG standards that hinder comparison and accountability. Regulatory uncertainty also slows adoption, as global financial institutions struggle with inconsistent policies (FSCA, 2024). Moreover, cyber security and data privacy add further complexity. As more financial transactions rely on tech-driven platforms, robust safeguards will be essential.

The integration of AI, blockchain, and IoT is expected to enable real-time sustainability tracking and tokenized ESG assets. The rise of Decentralised Sustainable Finance may even allow peer-to-peer green investing, bypass traditional institutions and opening new pathways for funding global climate solutions. Moreover, public-private partnerships will be key to accelerating adoption. Governments must offer tax incentives and regulatory clarity while tech companies must innovate with ethics, equity, and the environment in mind.

Green Fintech is not just a trend; it is a transformation. It has the power to shift global finance from a driver of degradation to a force for regeneration. As the world faces a critical decade for climate action, the role of finance has never been more important or promising. 

In the context of Bangladesh, Green Fintech holds immense potential to bridge the country's digital transformation with its urgent climate priorities. As a climate-vulnerable nation with a rapidly growing fintech ecosystem, Bangladesh stands at a strategic juncture to leverage digital financial solutions for sustainable development. By integrating environmental accountability into financial products and services-such as green microloans, digital crop insurance, and carbon-offset payment systems-Bangladesh can empower both rural and urban populations to participate in climate resilience. With supportive policy frameworks, public-private collaboration, and a focus on inclusive innovation, Green Fintech can become a powerful tool in advancing the country's Vision 2041 and SDG targets.

Dr Md Sharif Hassan, Lecturer (Fintech), School of Accounting and Finance, Taylor's University, Malaysia.

Rubaiyat Shaimom Chowdhury, Associate Professor (Finance), Department of Business Administration, Bangladesh University. rubaiyat.shaimom@gmail.com