Issue

Vol. 5 No. 2 (2026): October

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Fintech Enabled ESG Investing for Sustainable Finance and Responsible Capital Allocation

https://doi.org/10.33050/sabda.v5i2.1146
Khaizure Mirdad
Pandawan Institute
https://orcid.org/0009-0002-1592-2035
Kristoko Dwi Hartomo
Satya Wacana Christian University
https://orcid.org/0000-0003-0237-851X
Muhamad Yusup
Satya Wacana Christian University
https://orcid.org/0000-0003-3053-6562
Faustin Devanda
Pradita University

Corresponding Author(s) : Muhamad Yusup

982022017@student.uksw.edu

Startupreneur Business Digital (SABDA Journal), Vol. 5 No. 2 (2026): October

Abstract

The increasing global emphasis on sustainability has transformed financial markets by encouraging the integration of Environmental, Social, and Governance (ESG) criteria into investment decision-making. Despite this development, barriers related to information accessibility, transparency, investment efficiency, and limited investor awareness continue to constrain the broader adoption of ESG investing. This study examines the role of Financial Technology (Fintech) in addressing these barriers and strengthening the adoption and effectiveness of ESG investment practices. A descriptive comparative analysis combined with qualitative thematic analysis was employed to examine Fintech platforms, regulatory reports, investor behavior studies, and ESG investment trends, complemented by a quantitative assessment of ESG investment flows facilitated by digital technologies. The findings indicate that Fintech contributes to ESG investing by improving access to real-time ESG information, enabling automated portfolio allocation based on sustainability criteria, increasing transparency through digital data and analytics, and expanding access to sustainable investment products. The analysis also suggests that greater Fintech adoption is associated with increased investor engagement and capital flows toward sustainable investment opportunities. These findings highlight Fintech as an important enabler of more inclusive, efficient, and transparent ESG investment ecosystems. However, challenges related to ESG data standardization, regulatory alignment, data reliability, and technological accessibility remain significant barriers to maximizing its potential. Overall, the study demonstrates that the strategic integration of Fintech into sustainable finance can accelerate ESG investment adoption while supporting the broader transition toward environmentally responsible, socially inclusive, and financially sustainable investment practices.

Keywords

Fintech ESG Investing Sustainable Finance Capital Allocation Investment Adoption
Mirdad, K., Hartomo, K. D., Yusup, M., & Devanda, F. (2026). Fintech Enabled ESG Investing for Sustainable Finance and Responsible Capital Allocation. Startupreneur Business Digital (SABDA Journal), 5(2), 168–179. https://doi.org/10.33050/sabda.v5i2.1146
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. A. Williams, Y. Hasudungan, and N. Azizah, “The implementation of effective financial management to increase the profitability of startups,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 1, pp. 47–54, 2025.
  2. K. Zaman, J. Kadang, and A. Raza, “Esg investing: Impact on corporate behavior and financial performance,” Journal Markcount Finance, vol. 4, no. 1, pp. 14–26, 2026. [Online]. Available: https://garuda.kemdiktisaintek.go.id/documents/detail/6597762
  3. I. Khan and M. S. Shahid, “The nexus between fintech and green finance in advancing sustainable performance across countries,” Discover Sustainability, vol. 7, no. 1, p. 49, 2025.
  4. K. N. Y. Magableh, N. Badwan, M. Al-Nimer, S. Al-Khazaleh, S. Abdallah-Ou-Moussa, and Y. Chen, “Role of financial technology (fintech) innovations in driving sustainable development: A comprehensive literature review and future research avenues,” Journal of Science and Technology Policy Management, 2025.
  5. J. Junaedi, “Understanding the role of finance in sustainable development: A qualitative study on environmental, social, and governance (esg) practices,” Golden Ratio of Finance Management, vol. 4, no. 2, pp. 113–130, 2024.
  6. B. Bortolotti, G. Loss, and R. W. Van Zwieten, “The times are they a-changin’? tracking sovereign wealth funds’ sustainable investing: Bernardo bortolotti et al.” Journal of International Business Policy, vol. 6, no. 3, pp. 276–305, 2023.
  7. V. Agbakwuru, O. B. Onyenahazi, B. O. Antwi, and K. Oyewale, “The impact of environmental, social, and governance (esg) reporting on corporate financial performance,” International Journal of Research Publication and Reviews, vol. 5, no. 9, pp. 3629–3644, 2024.
  8. A. Felix and G. D. Rembulan, “Analysis of key factors for improved customer experience, engagement, and loyalty in the e-commerce industry in indonesia,” Aptisi Transactions on Technopreneurship (ATT), vol. 5, no. 2sp, pp. 196–208, 2023.
  9. A. Raihan and T. Sarker, “Financial mechanisms for advancing environmental sustainability: a comprehensive review,” Green Technology, Resilience, and Sustainability, vol. 6, no. 1, p. 4, 2026.
  10. S. K. Babu, A. Hameed, R. R. Nair, T. Babu, R. Sharma, R. Sungheetha et al., “Analyzing the digital transformation and evolution of financial technology (fintech) across various industries,” in 2024 4th International Conference on Innovative Practices in Technology and Management (ICIPTM). IEEE, 2024, pp. 1–8.
  11. T. Gulati, A. Singla, and P. Saini, “Sustainable digital finance and finance 5.0: A systematic review and research agenda,” South Asian Journal of Business Studies, pp. 1–25, 2025.
  12. P. Liu, “Investment decisions of blockchain-based anti-counterfeiting traceability services in a high-quality fresh supply chain of china,” Agriculture, vol. 12, no. 6, p. 829, 2022.
  13. A. Hamdouni, “From esg to financial stability: Unpacking the multi-dimensional impact of ai-driven fintech-related technology adoption on bank performance,” International Journal of Financial Studies, vol. 13, no. 4, p. 234, 2025.
  14. K. O. Mayegun and C. Nwanevu, “Harnessing big data and ai to revolutionize sustainability accounting and integrated corporate financial reporting,” International Journal of Computer Applications Technology and Research, vol. 14, no. 6, pp. 111–128, 2025.
  15. C. Lukita, M. Hardini, S. Pranata, D. Julianingsih, and N. P. L. Santoso, “Transformation of entrepreneurship and digital technology students in the era of revolution 4.0,” Aptisi Transactions on Technopreneurship (ATT), vol. 5, no. 3, pp. 291–304, 2023.
  16. F. Ahmad, A. Boumaiza, A. Sanfilippo, and L. Al-Fagih, “A detailed comprehensive role of digital technologies in green finance initiative for net-zero energy transition,” Advanced Energy and Sustainability Research, vol. 6, no. 10, p. 2500066, 2025.
  17. E. Macchiavello and M. Siri, “Sustainable finance and fintech: Can technology contribute to achieving environmental goals? a preliminary assessment of ‘green fintech’ and ‘sustainable digital finance’,” European Company and Financial Law Review, vol. 19, no. 1, pp. 128–174, 2022.
  18. A. Taheri and E. Taieby, “Integrating esg analytics into corporate decision-making: A data-driven approach for enhancing sustainable financial performance,” FAR Journal of Multidisciplinary Studies, 2025.
  19. R. K. Loh and G. M. Mian, “Do accurate earnings forecasts facilitate superior investment recommendations?” Journal of Financial Economics, vol. 80, no. 2, pp. 455–483, 2006.
  20. T. G. Majekodunmi, “Embedding ai in esg-financial reporting systems to enhance non-financial disclosure integrity, assurance, and investor decision relevance,” International Journal of Research Publication and Reviews, vol. 6, no. 6, pp. 464–484, 2025.
  21. R. Almadadha, “Blockchain technology in financial accounting: Enhancing transparency, security, and esg reporting,” Blockchains, vol. 2, no. 3, pp. 312–333, 2024.
  22. J. Singh, S. Bharany, S. Rani, A. U. Rehman, B. M. Taye, R. Pant, and U. Kaur, “A systematic review of blockchain, ai, and cloud integration for secure digital ecosystems,” International Journal of Networked and Distributed Computing, vol. 13, no. 2, p. 28, 2025.
  23. G. Nevi, R. Montera, N. Cucari, and F. Laviola, “Integrating ai and esg in digital platforms: New profiles of platform-based business models,” Journal of Engineering and Technology Management, vol. 78, p. 101913, 2025.
  24. C. Yamahaki, F. d. Mariz, and A. Vendramini, “Are thematic bond issuers keeping their promises? a contribution to the greenwashing analysis,” Revista de Administração da UFSM, vol. 19, p. e6, 2026.
  25. R. E. Duran and P. Tierney, “Fintech data infrastructure for esg disclosure compliance,” Journal of Risk and Financial Management, vol. 16, no. 8, p. 378, 2023.
  26. N. L. Rane, O. E. Chika, and J. Rane, “Business intelligence systems integrating artificial intelligence, big data analytics, machine learning, internet of things, and blockchain,” International Journal of Applied Resilience and Sustainability, vol. 2, no. 2, pp. 367–395, 2026.
  27. V. Ediagbonya and C. Tioluwani, “The role of fintech in driving financial inclusion in developing and emerging markets: issues, challenges and prospects,” Technological Sustainability, vol. 2, no. 1, pp. 100–119, 2023.
  28. M. W. Wicaksono, M. B. Hakim, F. H. Wijaya, T. Saleh, E. Sana et al., “Analyzing the influence of artificial intelligence on digital innovation: A smartpls approach,” IAIC Transactions on Sustainable Digital Innovation (ITSDI), vol. 5, no. 2, pp. 108–116, 2024.
  29. A. Primec, J. Belak, and M. Čufar, “Artificial intelligence as an emerging risk dimension in corporate sustainability reporting: A legal and governance perspective,” Sustainability, vol. 18, no. 5, p. 2278, 2026.
  30. Y. Huang, “Fintech as a catalyst for sustainable development: a bibliographic review of drivers, technologies, econometrics and regional insights,” Journal of Accounting Literature, 2025.
  31. M. S. Hassan, F. T. Zahra, F. M. Farouk, and W. N. W. Hussin, “Toward a digital and sustainable finance ecosystem: A systematic review and bibliometric analysis on fintech and esg,” Business Strategy & Development, vol. 9, no. 2, p. e70349, 2026.
  32. A. Chen, S. Wang, A. M. Mehta, M. Asif, S. Xu, and M. F. Shahzad, “Fintech adoption for esg integration through robo advisors, personalization, and perceived trust,” Scientific Reports, vol. 15, no. 1, p. 31125, 2025.
  33. P. K. Dadabada, “Analyzing the impact of esg integration and fintech innovations on green finance: A comparative case studies approach,” Journal of the Knowledge Economy, vol. 16, no. 2, pp. 7959–7978, 2025.
  34. Z. Kedah, “Use of e-commerce in the world of business,” Startupreneur Business Digital (SABDA Journal), vol. 2, no. 1, pp. 51–60, 2023.
  35. M. A. Adeoye, “Mastering the basics: A guide to research methodology for effective writing and publication,” Chalim Journal of Teaching and Learning, vol. 4, no. 1, pp. 30–41, 2024.
  36. J. K. Roy and L. Vasa, “Financial technology and environmental, social and governance in sustainable finance: A bibliometric and thematic content analysis,” Discover Sustainability, vol. 6, no. 1, p. 148, 2025.
  37. A. Albert, M. M. Mousavi, N. Ibeji, and F. B. Owusu, “Bridging esg and fintech: a technological approach to carbon performance,” Business Strategy and the Environment, vol. 34, no. 8, pp. 10 590–10 612, 2025.
  38. P. Pluskota, K. Słupińska, A. Wawrzyniak, and B. Wasikowska, “The application of artificial intelligence (ai) in the implementation of esg-oriented sustainable development strategies in the banking sector: a case study,” Sustainability, vol. 18, no. 2, p. 732, 2026.
  39. X. Sun and R. Oliva, “Qualitative meta-analysis with system dynamics modeling for process theory development,” System Dynamics Review, vol. 42, no. 1, p. e70022, 2026.
  40. U. P. Offiong, K. Szopik-Depczyńska, and G. Ioppolo, “Fintech innovations for sustainable development: A comprehensive literature review and future directions,” Sustainable Development, vol. 33, pp. 1459–1471, 2025.
Read More
Author biographies is not available.
Download this PDF file
PDF
Statistic
Read Counter : 0 Download : 0

Downloads

Download data is not yet available.