Role of Fintech in improving Corporate ESG Performance: Evidence from Pakistan

Abstract

In order to promote sustainable growth and enhanced well-being across economies, businesses are searching for methods to integrate Environmental, Social, and Governance (ESG) concepts into their operations. Therefore, raising the corporate ESG level for governments, businesses, and all stakeholders is currently regarded as a critical issue. Financial technology, or FinTech, may provide new approaches and be a remedy for the fundamental changes in the financial system brought about by technological innovation. Understanding how financial technology (FinTech) may improve business ESG performance is essential in Pakistan, where sustainability concerns are growing in importance with the country's rapid digital change. This research investigates the impact of FinTech on ESG performance of publicly listed textile companies in Pakistan during 2015-2024. The statistical analysis was performed using SPSS and STATA software. And found that FinTech implementation leads to better ESG performance by enhancing company internal controls and reducing financing constraints. The study shows how FinTech systems enable environmentally friendly business operations across Pakistan's developing market sectors. This study also offers helpful policy recommendations for investors, regulators, and corporate executives who wish to support digital financial innovation and sustainable economic development in Pakistan. Based on the aforementioned findings, it is also advised that the government provide relevant legislative assistance to encourage the expansion of FinTech and make efficient use of its financial resources and capabilities to enhance business ESG performance. FinTech will be able to effectively promote sustainable development and enhance business ESG performance as a result.