







































 

 

 
37 

© 2025 Conscientia Beam. All Rights Reserved. 

Greenwashing within the context of financial technology and sustainable development: 
Conceptual frameworks and theoretical perspectives   

 

 

 Tipon Tanchangya1+ 

 Asif Raihan2 

 Md Rakib Mia3 

 Ummah Tafsirun4 

 Kamron Naher5 

 Naimul Islam6 

 Fahad Rashid7 

 Shoaibur Rahman 
Sarker8 

 

1Department of Finance, University of Chittagong, Chittagong 4331, 
Bangladesh. 
Email: tipon.tcg.edu@gmail.com  
2Institute of Climate Change, Universiti Kebangsaan Malaysia, Bangi 
43600, Malaysia. 
Email: asifraihan666@gmail.com  
3Department of Business Administration, Ahsanullah University of Science 
and Technology, Dhaka -1212 Bangladesh. 
Email: mdrakibmia087@gmail.com  
4Department of Business Administration, Noakhali Science & Technology 
University, Noakhali-3814, Bangladesh. 
Email: ummah.tafsirun@gmail.com  
5Department of Business, Presidency University, Dhaka-1212, Bangladesh. 
Email: naherk@pu.edu.bd  
6Department of Accounting, Finance and Economics, University of 
Greenwich, London SE10 9LS, UK. 
Email: naimmgtdu75@gmail.com  
7Centre for Islamic Finance, University of Bolton, Bolton BL3 5AB, UK. 
Email: fr7bbs@bolton.ac.uk  
8School of Business and Law, Northumbria University, 110-114 Middlesex 
Street, E1 7HT, London, UK. 
Email: shoaibur.fin.du@gmail.com  

 

 
(+ Corresponding author) 

 ABSTRACT 
 
Article History 
Received: 2 December 2024 
Revised: 6 January 2025 
Accepted: 27 January 205 
Published: 31 January 2025 
 

Keywords 
Conceptual framework 
Financial technology 
Greenwashing 
Sustainable development goals 
Theoretical background. 
 

 

 
The study aims to explore the greenwashing phenomenon in the context of FinTech 
and sustainable development and analyze the conceptual frameworks and theoretical 
perspectives that connect greenwashing, FinTech, and sustainable development. A 
qualitative approach was employed in this research, which was primarily based on 
secondary data. The findings show that FinTech significantly contributes to 
sustainability by promoting environmental conservation, economic growth, and 
financial inclusion across various SDG domains. Additionally, the theoretical 
perspectives examine key theories (stakeholder theory, legitimacy theory, signaling 
theory, and institutional theory) and highlight how greenwashing practices might 
influence the FinTech sector. Furthermore, this study draws attention to the potential 
economic, social, and environmental impact of greenwashing on FinTech. Finally, the 
study offers valuable insights for strategy formulation to prevent companies from 
making misleading environmental claims. Above all, the present study makes a 
substantial contribution to the ongoing debate regarding the links between 
greenwashing, FinTech, and sustainable development.  
 

Contribution/Originality: This research integrates greenwashing within the FinTech solutions and sustainable 

development goals (SDGs). The research fulfils the literature gap of conceptual framework and theoretical 

perspective to prevent greenwashing. This study offers insights into the way to associate FinTech and SDGs as 

well as preserving moral practices. 

 

 

Financial Risk and Management Reviews 
2025 Vol. 11, No. 1, pp. 37-71 
ISSN(e): 2411-6408 
ISSN(p): 2412-3404 
DOI: 10.18488/89.v11i1.4076 
© 2023 Conscientia Beam. All Rights Reserved. 

 
 
 

 
 
 

 

 
 
 
 

https://orcid.org/0009-0009-2365-4959
https://orcid.org/0000-0001-9757-9730
https://orcid.org/0009-0004-7267-9515
https://orcid.org/0009-0005-5373-4619
https://orcid.org/0009-0001-9663-5427
https://orcid.org/0009-0005-7001-1770
https://orcid.org/0009-0001-2482-3808
https://orcid.org/0009-0000-4196-682X
mailto:tipon.tcg.edu@gmail.com
mailto:asifraihan666@gmail.com
mailto:mdrakibmia087@gmail.com
mailto:ummah.tafsirun@gmail.com
mailto:naherk@pu.edu.bd
mailto:naimmgtdu75@gmail.com
mailto:fr7bbs@bolton.ac.uk
mailto:shoaibur.fin.du@gmail.com
https://www.doi.org/10.18488/89.v11i1.4076


Financial Risk and Management Reviews, 2025, 11(1): 37-71 

 

 
38 

© 2025 Conscientia Beam. All Rights Reserved. 

1. INTRODUCTION 

1.1. Background and Role of FinTech in Sustainable Development 

Nowadays, an increasing number of new challenges impact financial management. This is due to the increasing 

digital transformation and the growing concerns of customers about environmental sustainability and respect in the 

products they purchase (Chueca Vergara & Ferruz Agudo, 2021). Traditional banks, FinTech, FinTech startups, 

and fully digital banks have all helped fuel the expansion of the financial products and services available in the 

modern economy (Klimontowicz, 2023). The banking industry is at the forefront of the financial technology 

(FinTech) revolution that is reshaping the industry and providing financial institutions with numerous advantages 

through the use of smartphones, AI, the Internet of Things (IoT), and blockchains (Dwivedi, Alabdooli, & Dwivedi, 

2021; Tanchangya et al., 2024b). The new digital realm has presented traditional banking institutions with 

substantial challenges, forcing them to adjust their operating models. The emergence and growth of FinTech have 

significantly impacted the financial industry.  

Research on the effects of financial technology on long-term sustainability is an emerging area. It is believed 

that the offerings of FinTech can be pushed to use to accelerate social development and aid in the attainment of the 

Sustainable Development Goals (SDGs) (Dwivedi et al., 2021; Klimontowicz, 2023). In addition, there is no 

doubting the evident social, environmental, and ecological advantages of this technology's implementation, which is 

driving investment in energy and environmental initiatives, renewable energy usage, and green infrastructure 

development (Deng, Huang, & Cheng, 2019). Furthermore, a more accessible, secure, and inexpensive financial 

system can be achieved through the use of FinTech, which, along with better service quality, can lead to a more 

stable, diverse, and user-friendly financial environment (Moro-Visconti, Cruz Rambaud, & López Pascual, 2020; 

Tanchangya, Raihan, Rahman, Ridwan, & Islam, 2024a). FinTech has made it easier for financial sectors to handle 

risks by incorporating new technologies with financial innovations like big data analysis and cloud computing. 

FinTech aims to speed up the integration of real and financial economies, creating more decentralised opportunities 

for sustainable growth (Castilla-Rubio, Robins, & Zadek, 2016). FinTech has the potential to accelerate the 

adoption of green finance, a method of investing that ensures both economic and environmental sustainability 

(Yang, 2020). Thereby, FinTech stands out as the most "revolutionary" technology in the financial services 

industry because it uses technology such as Artificial Intelligence (AI) and machine learning. These technologies 

facilitate data collection to determine customers' ESG ratings and encourage the funding of renewable energy 

projects that generate social, environmental, and ecological benefits (Chen, Siddik, Zheng, Masukujjaman, & 

Bekhzod, 2022; Rahman, Tanchangya, Rahman, Aktar, & Majumder, 2024; Zhou, Tang, & Zhang, 2020). FinTech 

contributes to SDGs by promoting financial inclusion and directing resources towards sustainable uses, providing 

access to diverse products and services to meet customer needs sustainably (Chueca Vergara & Ferruz Agudo, 2021; 

Dwivedi et al., 2021). 

 

1.2. Definition and Relevance of Greenwashing in FinTech Sector 

The need to battle climate change and reach sustainable development goals is becoming increasingly apparent 

as fintech grows in popularity. Ecological or environmentally friendly goods are in high demand as people seek to 

live more sustainably in response to the growing wave of environmental consciousness about the dangers of climate 

change. Pressure from customers, investors, and government agencies is increasing on firms to be more transparent 

about the environmental effects of their operations (Chueca Vergara & Ferruz Agudo, 2021). But with this 

development comes a growing concern: the proliferation of greenwashing practices in the business sector. 

Companies engage in "greenwashing" as a deceptive marketing strategy to attract environmentally conscious 

investors and consumers (Pimonenko, Bilan, Horák, Starchenko, & Gajda, 2020; Raihan et al., 2024). 

Companies' misleading or false advertising techniques that falsely represent their environmental obligations 

are referred to as "greenwashing" (De Freitas Netto, Sobral, Ribeiro, & Soares, 2020; Delmas & Burbano, 2011). 



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Without real commitment or influence, it is the advertisement of sustainable financial products or services that 

undermines initiatives for sustainability (Seele & Gatti, 2017). This refers to a pattern of fraudulent behaviour that 

makes a product or company seem more environmentally friendly than it actually is, with the intent to deceive 

customers into buying it. This type of marketing misleads consumers by describing a product's environmental 

features in a way that is difficult to understand by making ecological claims that are not backed by evidence or by 

making exaggerated claims about the product's environmental features while concealing or omitting relevant facts 

(Chueca Vergara & Ferruz Agudo, 2021; Rahman, Rahman, Tanchangya, & Esquivias, 2023). 

People around the world are becoming more aware of the misleading or outright false environmental claims 

that businesses, non-governmental organizations (NGOs), and even governments make when they communicate 

about their plans to deal with environmental and climate problems. Organizations can exploit such claims to boost 

their reputations, customer and employee relationships, or short-term profitability. However, they are unlikely to 

implement the real changes that are needed to quickly lessen their harmful effects on the environment (Nemes et al., 

2022). Greenwashing is still prevalent even if people are becoming more aware of it. When viewed from the lens of 

fintech, an area where new, sustainability-focused financial products have been made easier to create and market 

because of the combination of technology and finance, this issue takes on further significance. There have been cases 

where fintech companies have positioned their investing platform as eco-friendly, promising to reinvest in green 

projects and sustainable companies. Investments made by companies could be greenwashed if they don't conduct 

impact assessments or comply with established environmental guidelines.  

 

1.3. Objectives and Structure of the Study 

The objectives of this study are to investigate greenwashing and its effects on FinTech and sustainable 

development and to analyze the conceptual frameworks and theoretical perspectives that underpin the relationship 

between fintech, sustainability, and greenwashing. In section 2, conceptual framework is discussed. Section 3, 4, 5 

and 6 discussed on theoretical perspective, greenwashing Impact on FinTech, case studies, strategies to reduce 

greenwashing respectively. Finally, conclusion is shown in section 7. 

 

2. CONCEPTUAL FRAMEWORK 

2.1. Conceptual Framework for Understanding Greenwashing  

2.1.1. Historical Background and Evolution of Greenwashing 

This practice of "greenwashing" is not new, and it's not a response to consumer demands for environmental 

protection. It was actually well-known as early as the mid-1980s (Dahl, 2010). The term "greenwashing" was 

initially introduced by American environmentalist Jay Westerveld in 1986 to denote the falsified environmental 

practices that hotels implement in their daily operations. A new term has been coined by combining the words 

"green" and "bleaching." "Green" means healthy, natural, and environmentally friendly. To use the term 

"bleaching" to describe the process of "washing away the material with water" For this discussion, greenwashing 

can be understood to mean the practice of applying a false green colour to an object in order to conceal the actual 

colour (Wang et al., 2023). On the contrary, Mitchell and Ramey (2011) stated that greenwashing is a hybrid of 

"green" and "brainwashing," using the second term in reference to environmental issues. Therefore, greenwashing 

arises when companies try to resolve the conflict between how much they really care about the environment and 

how much they try to play a role in greenwashing. Scholars characterised greenwashing as a tactic that is founded 

on disclosure (Cooper, Raman, & Yin, 2018; Lee & Raschke, 2023) and may be affected by external constraints, 

incentives, or forces that shape the institutional atmosphere where the strategies of falsely reporting green 

initiatives are made (Li, Li, Seppänen, & Koivumäki, 2023; Seele & Schultz, 2022; Velte, 2022). 

Many academic fields have looked into the idea of "greenwashing," and it has also been brought up in 

discussions among different government agencies and NGOs. Legal studies, production engineering, environmental 



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studies and management, advertising, ethics, and marketing are just a few of the areas that have contributed to its 

conceptualization and understanding. Social science has also played a role. Given the multitude of opinions, it's not 

surprising that there is no widely agreed-upon definition of greenwashing. Concepts of greenwashing are also 

constantly changing in response to the issue's growing significance and attention, making it a shifting target in 

discussions among academics, practitioners, and policymakers (Nemes et al., 2022). 

 

2.1.2. Types and Characteristics of Greenwashing 

Greenwashing occurs when a company or organisation misleads its customers about its environmental 

practices (firm level) or the ecological benefits of its products and services (product/service level) (Delmas & 

Burbano, 2011). Greenwashing can take various forms. Prior research has mostly focused on two main categories of 

greenwashing: claim and execution greenwashing. 

So far, most studies have been conducted regarding product or service-level claims of greenwashing. This is 

when companies make an environmental claim about a product or service that isn't true by using textual 

justifications that directly or indirectly highlight how beneficial it is for the environment (De Freitas Netto et al., 

2020). Other kinds of claims, all taken from existing (Nemes et al., 2022) studies, are also used in greenwashing. a) 

Selective disclosure claims: based on a small number of characteristics, divert attention away from the broader 

environmental effect of the company. b) Empty claims: when company policies or claims either overstate their 

accomplishments or do not deliver on their commitments. c) Irrelevant claims: statements about achievements that 

are either inconsequential or compelled by law or rivals. d) Lies: statements are completely false. e) Just not 

credible: when a potentially harmful or divisive action, policy, or product is portrayed as having environment-

friendly benefits. f) Dubious certifications and labels: the claim has certifications that are easy to counterfeit. g) 

Political spin: proclaims its commitment to environmental sustainability while actively opposing environmental 

legislation. h) Vagueness: the idea is not clearly articulated, and hence, the intended significance is ambiguous. i) 

Jargon: The claim's language and facts are difficult for the consumers to understand and evaluate clearly. j) 

Misleading symbols: a deceitful impression of the organisation's eco-friendliness is created by the usage of symbols 

and images. 

Further, claim type and claim deceptiveness were the two categories of green claims that Carlson, Grove, and 

Kangun (1993) proposed. In the first category, there is product orientation, which emphasises the ecological 

features of the product or service; second, process orientation, which emphasises the ecological features of the 

production process or technology; third, image orientation, which emphasises the creation and enhancement of an 

environmentally friendly company reputation, for example, by showing pro-environmental activities and initiatives; 

fourth, environmental fact, which includes claims including an organisation's allegedly factual statement regarding 

the environment as a whole; and finally, combination, which includes at least two of these types of approaches. The 

second category includes: a) vague or ambiguous: claims that are ambiguous, unclear, and not precise; b) omission: 

claims that lack the information required to evaluate their validity; c) false/outright lie: claims that are misleading 

or fabricated; d) combination: claims that fall into two or more of the above categories; and e) acceptable: claims that 

have no false elements. 

Executional greenwashing was defined by Parguel, Benoit-Moreau, and Russell (2015) as a new type of 

greenwashing. This greenwashing tactic avoids making any of the above-mentioned claims to attract consumers. It 

rather uses imagery depicting natural aspects, such as the green and blue colours or the sounds of the ocean or 

birds. For example, materials that evoke nature in an execution could be backgrounds depicting mountains, 

woodlands, or beaches; images of endangered animals like pandas or dolphins; or renewable energy sources like 

wind or waterfalls (Parguel et al., 2015). Intentional or not, these aspects that portray nature could lead people to 

believe that the company is environmentally friendly erroneously. These elements can stimulate subconscious 



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© 2025 Conscientia Beam. All Rights Reserved. 

allusions to the environment through nature visuals, consequently sparking ecological inferences subtly (Hartmann 

& Apaolaza-Ibáñez, 2009; Parguel et al., 2015). 

 

2.1.3. Mechanisms of Greenwashing 

Jones (2019) highlights that the act of greenwashing cannot be accurately uncovered through the evaluation of 

company narratives, whether through quantitative or qualitative methods, in commercials, corporate sustainability 

reports, or any other form of corporate disclosure. Ultimately, it is impossible to evaluate these narratives for 

truthfulness because they are highly volatile, and the customer's focus is too automatically diverted. Analyzing how 

greenwashing functions needs a way of thinking about the systems that allows for a more closely orientated view of 

how greenwashing acts. An examination of the three levels of analysis—micro (the product), meso (the company), 

and macro (the industry)—in this conceptual framework for greenwashing would be necessary. Considerations of 

alternative products, competitors, and industry standards help us make sense of how greenwashing occurs. To 

broaden the scope of greenwashing, Seele and Gatti (2017) propose including the idea of subjectivity. They claim 

that the term "greenwashing" is subjective; that is, certain stakeholders might perceive a particular green message 

as greenwashing, and others may not. Therefore, it emphasizes that greenwashing cannot exist in the absence of 

accusations. In simpler terms, greenwashing does not occur until a stakeholder group claims so. This further 

supports the argument of the ambiguous nature of greenwashing, as it is not a black-and-white concept. 

When stakeholders learn the truth about a greenwasher, the tactic works temporarily, but it damages the 

company's reputation and takes a long time to recover (Ferrón‐Vílchez, Valero‐Gil, & Suárez‐Perales, 2021). As an 

added downside, greenwashing can make stakeholders lose faith in a company and their investment plans (Pizzetti, 

Gatti, & Seele, 2021). Thus, businesses should think about the potential consequences since they can impact the 

market in unexpected ways. Misleading communications influence the actions and attitudes of stakeholders, which 

in turn affect the credibility and image of the company; therefore, businesses must embrace a more genuine 

communication approach while making green claims (Torelli, Balluchi, & Lazzini, 2020). 

 

2.2. Financial Technology  

2.2.1. Definition and Scope of FinTech 

Fintech (financial technology) is the technology and innovation that aims to deliver competitive financial 

services through cutting-edge technologies like artificial intelligence, robotics, or blockchain. FinTech is an 

umbrella term that describes many kinds of applications (mobile banking, online payment processing, automated 

investment services, and more) and cryptocurrencies. By utilizing modern technology, FinTech aims to provide 

financial services in the most efficient, cost-effective, and accessible way possible.  

FinTech is a broad term that can be applied to almost any sector of the financial services arena or new financial 

products that have been previously unavailable or not easily accessible. This revolution, driven by technology, is 

currently changing the landscape of the value proposition of financial services by creating new distinctive models of 

operations, increasing the accessibility of financial services products, and improving the experience of customers. 

Statista (2023) stated that the global FinTech market was valued at $127 billion, which shows that the market is 

still growing steadily. In 2018, the total value reached 66 billion USD, and it predicts that the CAGR will be around 

an annual growth rate of 24.8% from 2019 to 2025; the worth of the digital twin market will reach $460 billion in 

2025. Therefore, FinTech has become a fundamental enabler of the new economy, as is evidenced by its exponential 

growth. 

 

 

 

 



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2.2.2. Key Areas of FinTech 

The FinTech sector comprises several key areas, each contributing uniquely to the financial services landscape. 

These areas include Blockchain, Crowdfunding, Digital Banking, Peer-to-Peer Lending, Mobile Banking Payments, 

InsureTech, and Robo-Advisors. 

Figure 1 presents key fintech solutions and their individual market value and expected growth between 2021 

and 2030. 

 
Figure 1. Market value and growth projections of key fintech areas (2021-2030). 

 

• Blockchain: Blockchain technology is one of the most disruptive innovations in FinTech. Information is saved 

on several computers in a distributed ledger system with a permissive consensus mechanism, providing 

transparency and security over the data records. The most famous use case for blockchain is in 

cryptocurrencies like Bitcoin and Ethereum, though it has far more applications beyond digital money. With its 

ability to ensure safe and transparent transactions, blockchain technology is a game-changer in the fight 

against fraud in the financial sector. It is not limited to activities such as cross-border payments and trade 

finance. PwC (2022) anticipates that blockchain will contribute $1.76 trillion in growth across a range of 

sectors globally, with financial services being a primary beneficiary. These factors have made blockchain the 

backbone of numerous FinTech advancements, as it eliminates intermediaries and enhances trust, thereby 

making financial transactions more secure. 

• Crowdfunding: Crowdfunding is yet another substantial activity in FinTech. These platforms make it possible 

to raise capital for a wide range of projects or funding opportunities for both individuals and organisations from 

many individuals, particularly over the Internet. Crowdfunding has made it easier for startups, small 

businesses, and individuals to access capital without constantly engaging and relying on the typical financial 

sector. Platforms like Kickstarter, Indiegogo, and GoFundMe have transformed fundraising by offering direct 

connections between creators, entrepreneurs, and donors. For example, the global crowdfunding market was 

worth $12.27 billion in 2021, according to the Cambridge Centre for Alternative Finance (2022) with a 

prospective future of more people patronising the platform. 

• Digital Banking: Digital banking is the term used in the retail industry for servicing using electronic payment 

systems. It allows customers to conduct transactions and receive various services through mobile apps or 

websites of registered financial institutions. Digital banking has transformed how customers have traditionally 



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interacted with banks—it is faster, more convenient, cheaper, and, in many cases, provides better customer 

service. Another developing concept is neobanks without a physical presence, which have received much 

attention recently. Examples of these include Chime, N26, and Revolut. Such services these banks provide are 

online savings accounts, payment transfers, investments, etc., at comparatively lower charges than the large-

scale banks. The global size of the digital banking market was estimated to be and is expected to reach $9.4 

billion in 2021, and it is estimated to show an 8% CAGR through the following years. 9% from 2022–2030. 

• Peer-to-Peer Lending: Peer-to-peer (P2P) lending platforms are those venues where individuals can lend or 

borrow money directly from or to each other without the involvement of a traditional bank or financial 

institution. These platforms connect people looking to lend with borrowers, which usually provides better rates 

for everyone. P2P lending has also emerged as one of the most critical segments of the overall FinTech space, 

which helps different categories of borrowers who cannot get loans from banks regularly for specific reasons, 

such as lack of credit history. LendingClub and Prosper are available, and through them, a few billion dollars 

for different loans have been provided, thus increasing access to credit. Thus, Statista (2023) revealed that the 

P2P lending market is expected to grow to $558 billion worldwide. Up to 91 billion by 2027, the demand for 

non-banking institutions will only increase due to the need for new types of credit products. 

• Mobile Banking Payments: Mobile banking payments represent a significant portion of the FinTech industry. 

Users can make financial transactions directly through their smartphones, including everything from moving 

money to paying bills or even tapping a mobile app at the point of sale in-store. The emergence of mobile 

payment systems like Apple Pay, Google Wallet, and Alipay has made cash transactions almost extinct, 

especially in emerging markets with high smartphone penetration. As per Allied Market Research (2022) the 

global mobile payment market was valued at $1.48 trillion in 2021 and is expected to reach $12.06 trillion by 

2030, registering a CAGR of 29.1% from 2022 to 2030. 

• InsureTech: InsureTech, a division of FinTech, is at the forefront of transforming the insurance industry. It 

uses technological means to create new pathways and sometimes acts as an intermediary for economic 

development. By revolutionising how insurance is distributed, data-driven InsureTech companies significantly 

enhance the user experience and financial performance of transactions. They also introduce new payment 

products that are more tailored to specific needs, reshaping the insurance industry. InsurTech innovations 

include usage-based insurance, on-demand insurance, and peer-to-peer models. Startups such as Lemonade and 

Root have redefined insurance services with lower premiums, simplicity, and transparency compared to 

traditional methods. The global InsureTech market is predicted to reach $60.98 billion in 2028 from the 

projections of Accenture (2023) pushed by the growing utilisation of digital technologies in insurance 

technology, as reported here. 

• Robo-Advisors: Robo-advisors, with their user-centric approach, are self-service applications that provide 

financial advice and management recommendations based on advanced algorithms with no human intervention. 

They offer investment strategies tailored to the user’s risk profile, budget, and time preferences, making the 

user feel considered and important. Robo-advisors have made consulting affordable due to their relatively low-

cost solutions, which otherwise would have been out of reach for most individuals. This has enabled firms such 

as Betterment and Wealthfront to emerge as some of the most prominent robo-advisors, managing several 

billions of dollars. The global robo-advisors market was worth $987 million and is expected to grow at a 

compound annual growth rate (CAGR) of 18% over the next five years. It was valued at $4 billion in 2021, and 

its market is projected to rise at a CAGR of 29% between 2022 and 2030 (Research and Markets, 2023). 

 

 

 

 



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Following Table 1 presents the key fintech solutions, their definition, market size, and project growth:  

  

Table 1. Key areas of fintech. 

Key area Definition Market size 
(2021) 

Projected growth 

Blockchain Decentralized ledger technology 
enabling secure transactions 

$6.6 billion $1.76 trillion by 2030 (PwC, 
2022) 

Crowdfunding Online platforms for raising funds 
from the public 

$12.27 billion Continuous growth (Cambridge 
Centre for Alternative Finance, 
2022) 

Digital banking Banking services provided through 
digital channels 

$9.4 billion CAGR of  8.9% (2022-2030)  

P2P lending Direct lending and borrowing 
between individuals 

$158.6 billion $558.91 billion by 2027 (Statista, 
2023) 

Mobile 
Payments 

Financial transactions conducted via 
smartphones 

$1.48 trillion $12.06 trillion by 2030 (Allied 
Market Research, 2022) 

InsureTech Technology-driven innovations in 
insurance 

$60.98 billion 
by 2028 

Growing adoption (Accenture, 
2023) 

Robo-Advisors Automated investment management 
services 

$987.4 billion CAGR of  29% (2022-2030) 
(Research and Markets, 2023) 

 

2.3. Sustainable Development Goals  

2.3.1. Introduction to SDGs 

The Sustainable Development Goals (SDGs) are a set of 17 integrated goals meant to be a ‘roadmap to a better 

and more sustainable future for humanity.’ The United Nations set these goals out in 2015 and target areas like 

poverty, inequality, sustainability, the environment, peace, and justice, among others. These goals are intended to 

be realised by 2030 as part of the 2030 Agenda for Sustainable Development, to which all UN members have 

committed. 

The SDGs are well encapsulated, encompassing development in several areas of human endeavour in social, 

economic, and environmental realms. They are founded on the principles of equity with the aim of universalism in 

fulfilling development goals. These 17 specific objectives are characterised by 169 targets and 231 distinct 

indicators that clarify the steps to be followed in the monitoring process. The following Table 2 summarises the 17 

SDGs: 

 

Table 2. Summary of 17 sustainable development goals. 

SDG 
number 

Goal Description 

1 No poverty End poverty in all its forms everywhere. 

2 Zero hunger End hunger, achieve food security and improved nutrition, and 
promote sustainable agriculture. 

3 Good health and well-being Ensure healthy lives and promote well-being for all at all ages. 

4 Quality education Ensure inclusive and equitable quality education and promote 
lifelong learning opportunities for all. 

5 Gender equality Achieve gender equality and empower all women and girls. 

6 Clean water and sanitation Ensure availability and sustainable management of  water and 
sanitation for all. 

7 Affordable and clean energy Ensure access to affordable, reliable, sustainable, and modern 
energy for all. 

8 Decent work and economic 
growth 

Promote sustained, inclusive, and sustainable economic growth, full 
and productive employment, and decent work for all. 

9 Industry, innovation, and 
infrastructure 

Build resilient infrastructure, promote inclusive and sustainable 
industrialization, and foster innovation. 

10 Reduced inequality Reduce inequality within and among countries. 

11 Sustainable cities and Make cities and human settlements inclusive, safe, resilient, and 



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SDG 
number 

Goal Description 

communities sustainable. 

12 Responsible consumption 
and production 

Ensure sustainable consumption and production patterns. 

13 Climate action Take urgent action to combat climate change and its impacts. 

14 Life below water Conserve and sustainably use the oceans, seas, and marine resources 
for sustainable development. 

15 Life on land Protect, restore, and promote sustainable use of  terrestrial 
ecosystems, manage forests sustainably, combat desertification, and 
halt biodiversity loss. 

16 Peace, justice, and strong 
institutions 

Promote peaceful and inclusive societies, provide access to justice 
for all, and build effective, accountable institutions. 

17 Partnerships for the goals Strengthen the means of  implementation and revitalize the global 
partnership for sustainable development. 

 

2.3.2. Contribution of FinTech in Achieving SDGs 

Financial Technology (FinTech) has played a significant role in implementing the Sustainable Development 

Goals since it focuses on how technology can be used to develop new solutions to economic challenges, contributing 

to economic growth, financial inclusion, and promoting environmental conservation. In several areas, such as 

finance, climate, and the economy, FinTech can help create an impact on the SDGs. 

• Financial Inclusion: FinTech drives innovation in the delivery of financial services, which is crucial for 

eradicating poverty (SDG 1) and creating decent jobs (SDG 8). Due to the use of technology, FinTech 

firms can reach consumers in areas that traditional financial institutions cannot penetrate, such as rural 

regions. Mobile banking, digital wallets, and microfinancing are excellent examples of innovative FinTech 

systems that have helped bring financial services to millions worldwide. 

For example, the mobile money service M-Pesa, developed in Kenya, has significantly impacted financial 

literacy. By 2021, M-Pesa had more than 50 million users in Africa, enabling secure and easy transactions, as well 

as savings and loans (Safaricom, 2021). This has led to a reduction in poverty levels and economic stability in the 

region, thereby improving the standard of living for the people. Globally, the World Bank (2020) reported that 

digital financial services could potentially contribute to a GDP boost of up to 6% in developing economies by 2025, 

clearly showing the power of FinTech to drive economic growth. 

• Climate Action: Another benefit of FinTech is that it can help finance climate change mitigation and 

adaptation measures and support the shift towards a low-carbon economy. With green bonds, carbon 

trading, and crowdfunding for renewable energy projects, FinTech innovations enable organisations to 

source capital for sustainable development. 

For instance, green bonds, fixed-income financial instruments designed to finance environmentally sustainable 

projects, have grown in popularity. The Climate Bonds Initiative (2022) explains that global green bond issuance 

was recorded at $517.4 billion in 2021, an improvement of 49% from the previous year’s figure. Through the 

issuance and trading of green bonds, FinTech platforms help investors contribute to projects aligned with SDG 13, 

such as renewable energy, energy efficiency, and efficient transportation. 

Furthermore, the study reveals that FinTech can also improve transparency and accountability in carbon 

markets through the application of blockchain technology. This technology can be used to design ledgers of carbon 

credits that are resistant to tampering and misinformation about emissions reduction. This can help curb 

greenwashing, as the public can easily verify the environmental claims made by companies. 

• Sustainable Economic Growth: By proactively encouraging the opening of financial markets, participating 

in, and promoting non-traditional financial innovation, FinTech enables the construction of sustainable 

and efficient economic structures. By lowering the cost of transactions, enhancing credit availability, and 



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promoting superior resource mobilisation, FinTech might help build sound physical infrastructure and 

sustainable industries. 

If we take the example of SDG 9 (Industry, Innovation, and Infrastructure), FinTech has offered the P2P 

Lending Platform to fund small and medium enterprises (SMEs). SMEs are a significant source of employment and 

economic growth, especially in the developing world. However, they need help accessing formal sources of 

financing with collateral or credit histories. Funding Circle and Prosper are two peer-to-peer lending firms that 

offer a solution to this issue by allowing SMEs to borrow from individual investors, thus obtaining the capital 

needed for expansion. 

FinTech's influence extends to promoting responsible consumption and production, aligning with SDG 12. By 

providing consumers with tools that offer immediate information about the carbon footprint of products, FinTech 

empowers them to make informed decisions. Furthermore, FinTech's role in financing businesses that focus on 

recycling, reuse, and waste minimisation contributes to the development of the circular economy. Table 3 shows 

some SDGs that can be contributed to with the help of fintech solutions. 

  

Table 3. Contribution of fintech to selected SDGs. 

SDG FinTech contribution Examples 

SDG 1: No poverty Promotes financial inclusion by providing access to financial 
services for underserved populations. 

M-Pesa, microfinance 
platforms 

SDG 7: Affordable and 
clean energy 

Facilitates investment in renewable energy projects through 
green bonds and crowdfunding platforms. 

Green bonds, 
renewable energy 
crowdfunding 

SDG 8: Decent work 
and economic growth 

Supports economic growth by providing access to credit for 
SMEs and enabling more efficient financial transactions. 

P2P lending platforms 
like funding circle 

SDG 9: Industry, 
innovation, and 
infrastructure 

Drives innovation in financial services, reducing transaction 
costs, and improving resource allocation. 

Blockchain technology, 
InsureTech for 
resilience 

SDG 12: Responsible 
consumption and 
production 

Enables consumers to make informed choices by providing 
transparency on the environmental impact of  products and 
services. Supports the circular economy by financing 
sustainable businesses. 

Digital platforms for 
sustainable 
consumption 

SDG 13: Climate action Enhances transparency in carbon markets through 
blockchain technology, and mobilizes capital for climate 
action through green finance instruments. 

Carbon trading 
platforms, climate 
bonds 

 

Although FinTech can be a game changer in implementing the SDGs, we need to cautiously examine its 

associated risks and challenges. The most important fear is that FinTech services may create inequities rather than 

reduce them. Despite progress on financial inclusion, as in the case of mobile banking services, which allow people 

who live far from physical branches to access needed services, digital divides remain. This divide is key to ensuring 

FinTech delivers widespread good. 

With the rapid growth of FinTech, there have also been worries raised on greenwashing. If FinTech companies 

continue to private-label their products and services as sustainable, some are at risk of greenwashing—

exaggerating the environmental benefits that they offer. It underscores the importance of investing in strong 

regulatory frameworks and transparency to prevent FinTech from advancing exclusively fictitious solutions for 

sustainable development. 

 

3. THEORETICAL PERSPECTIVE  

3.1. Stakeholder Theory  

3.1.1. Explanation and Relevance to Greenwashing in FinTech 

Freeman (1984) developed stakeholder theory. It suggests that the concept of “business” focuses on satisfying 

the needs of stakeholders rather than just shareholders. A stakeholder is any person or group who has an interest in 



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or can influence the achievement of an organization’s objectives. When evaluating FinTech and sustainable 

development, the key players involved are customers, employees, shareholders, the government, environmental 

officers, and other community members. 

The usefulness of stakeholder theory in the context of greenwashing in FinTech lies in how the theory helps 

identify the roles and impacts of stakeholders who are either interested in or affected by greenwashing. Companies 

in the FinTech sector also make significant efforts to become pioneers of sustainable finance solutions in their daily 

operations. However, when such firms make false claims about their stewardship of the natural environment, it 

erodes the trust and legitimacy that are the lifeblood of these organizations. 

Greenwashing in FinTech comes in various forms, from covering up a financial product presented as 

ecologically beneficial without sufficient evidence, to overstating the ecological value of their operations, and failing 

to disclose the environmental drawbacks of their innovative technologies. Not only does this mislead consumers and 

investors, but it also leads to severe consequences, including reputational damage, legal actions, and the loss of 

stakeholder trust. Pimonenko et al. (2020) reported that about 78% of consumers consider environmental 

responsibility commitments when making their purchases; therefore, a genuine commitment to sustainability is 

crucial. 

 

3.1.2. Analysis of Stakeholders' Interests and Impacts 

Customers: In the current FinTech environment, consumers are expecting more honesty and transparency 

from the organisations they transact with. According to Accenture (2022) a survey revealed that 62% of consumers 

are willing to buy goods and services from firms that display or explain their environmental policies. Greenwashing 

practices mislead customers, leading to consumer doubt, loss of customers, and a decline in market share. For 

instance, when a FinTech firm promotes financing environmental projects but, in reality, channels the investments 

to fossil fuel projects, clients may feel deceived and seek other service providers. 

• Investors: Investors are another vital stakeholder category influenced by the phenomenon of greenwashing in 

FinTech. Sustainability reports are helpful to many investors, especially those interested in sustainable 

investments who prefer accurate sustainability reports. A publication by Morningstar (2023) showed that 

sustainable funds globally were worth $3.9 trillion in 2022, signaling a high level of investor demand for green 

financial instruments. The consequences of greenwashing for a FinTech company include: ivestment by 

investors keen on tracking sustainability issues, loss of share price and challenges in securing future rounds of 

funding. 

Moreover, the dissemination of false information through greenwashing can lead to legal actions against 

companies. This is evidenced by several large firms that have been sued for greenwashing, highlighting the legal 

risks associated with misleading sustainability claims. 

• Employees: The current generation of employees, particularly younger workers in the FinTech industry, 

increasingly values the personal and ethical standards of their organizations. A survey report conducted by 

Deloitte (2021) revealed that 49% of millennials and 44% of Gen Z employees would not join an organization 

that does not align with their values. Greenwashing results in organizational withdrawal, low organizational 

commitment, and increased turnover among employees who perceive a discrepancy between the organization's 

actions and environmental claims. 

• Regulators: Various regulatory bodies are tasked with preventing organizations from engaging in 

greenwashing. Regulations from central bodies, such as the U.S. Securities and Exchange Commission (SEC) or 

the EU Green Taxonomy, entail severe consequences for guilty FinTech firms. Penalties may include fines, 

suspension of operations, or corrective measures. For instance, in late 2021, the SEC launched the Climate and 

ESG Task Force to investigate schemes of ESG-related misconduct, highlighting the regulatory threats 

associated with greenwashing (U.S. Securities and Exchange Commission (SEC), 2021). 



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• Environmental Groups and the Community: Environmental groups, such as civil society organizations and 

environmentalists, play a crucial role in monitoring and policing companies’ environmental claims. When 

companies engage in greenwashing, they risk facing protest actions, negative publicity, and other detrimental 

effects on their brand image. Furthermore, the deception that does not align with the vision of environmental 

sustainability poses harmful effects on the environment and society in the future, as climate change and social 

justice issues are pressing concerns today. 

 

3.2. Legitimacy Theory  

3.2.1. Understanding Legitimacy within the FinTech Context 

Legitimacy theory originated from the idea that an organization aims to function in a manner that aligns with 

societal standards to be recognized and accredited. Suchman (1995) defined legitimacy as a generalized assumption 

that an entity's actions are appropriate or warranted within a framework of established norms, values, beliefs, and 

definitions. In the context of FinTech, legitimacy is crucial because it determines the level of acceptability of 

decisions made by FinTech firms by their customers, investors, regulators, and the public. 

Reasonably expected, FinTech companies are situated where the financial and technology sectors coexist. Both 

sectors are highly regulated and supervised entities that must respond to societal expectations. The financial 

products and services launched by such companies entail legitimacy based on several factors, including companies 

working in line with societal goals of addressing relevant financial problems, adhering to sustainable development 

goals, and respecting clients' privacy rights. Such companies will find it easier to establish themselves in the market. 

The need to attain legitimacy in the FinTech sector is well-founded, given that trust-building structures are 

the foundation for adopting financial solutions. In PwC (2021) global survey, 70% of consumers identified 

credibility as the primary factor when selecting their preferred financial services provider. For new firms operating 

in a dynamic sector that has yet to be fully developed, achieving and maintaining legitimacy to gain customers' 

trust, secure investments, and meet regulatory requirements is crucial. 

 

3.2.2. Impact of Greenwashing on Organizational Legitimacy 

The threat of greenwashing, which involves a company or organization deliberately providing its stakeholders 

with false perceptions about its environmentally friendly products or operations, has jeopardized FinTech 

companies' legitimacy. However, when FinTech firms engage in greenwashing, they risk losing the trust of 

shareholders, damaging their reputation, and facing the consequences imposed by regulatory authorities, all of 

which erode their organizational legitimacy. 

In this respect, greenwashing threatens legitimacy as it creates a misalignment between a firm’s words and 

actions. For instance, when a FinTech firm claims that its products are environmentally friendly or support 

sustainability but, in reality, do not contribute to this social cause, or when the firm does not support sustainability 

initiatives but publicly declares otherwise, stakeholders will view the firm as deceptive. This can create perceptions 

that are hard to dispel, and organizations and individuals who lose the public’s trust do so at a significant cost. 

According to Seele and Gatti (2017) greenwashing has significant consequences, as public trust is lost, and a 

company takes a long time to regain it. 

However, greenwashing puts a firm under the scrutiny of regulatory authorities and exposes it to costly legal 

suits, thereby challenging its legitimacy. Various authorities from different countries, including the EU Green 

Taxonomy and the SEC in the United States, require that organizations and firms not engage in greenwashing but 

instead disclose accurate and verifiable information regarding their environmental responsibility. For instance, in 

2021, the SEC declared that it would increase the scrutiny of ESG disclosures, particularly concerning 

environmental statements (U.S. Securities and Exchange Commission (SEC), 2021). The penalties for such cases of 



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greenwashing may include fines, prosecution, restrictions on business activities, and, in worse cases, outright 

closure, which can ultimately erode legitimacy. 

The effect of greenwashing on organizational legitimacy is compounded by increasing concern and activism 

among customers and shareholders regarding ecological matters. According to Lim, Cheah, Ngo, Chan, and Ting 

(2023) 66% of global consumers are willing to pay a premium for sustainable products, and 81% expect brands to 

lead on environmental change. When FinTech companies engage in greenwashing, they risk losing 

environmentally conscious consumers and are likely to be abandoned by ethical investors. Sustainable investment 

funds were valued at $35.3 trillion globally in 2022, representing a third of the total AUM of sustainable 

investments (Global Sustainable Investment Alliance (GSIA), 2022). Shareholders of these funds are highly aware 

of greenwashing, and as soon as they detect such deception, they withdraw their investments, erasing any 

legitimacy the company may have had. 

However, most importantly, this study reveals that greenwashing puts organizational legitimacy at risk in the 

current year and in the future. It also limits a company’s capacity to adapt and develop its products and services. 

Since FinTech businesses depend on technology and customers to function, it is critical to maintain a suitable and 

lawful image. Greenwashing damages this image and fosters skepticism and distrust, which hinders the continuous 

improvement of new innovations and reduces consumers’ and partners’ willingness to engage with the company. 

 

3.3. Signaling Theory 

3.3.1. Basic Principles of Signaling Theory 

Signaling theory can be attributed to Michael Spence, who presented it in 1973. It deals with information 

asymmetry and how the party with the information, such as the seller or the company, holds information not 

available to the other party, like the buyer or the stakeholder. According to the theory, this gap is bridged when the 

informed party sends a signal to communicate qualities or intentions that would otherwise be impossible for the 

other party to observe. Such signals can take actions, statements, or any other form of communication that helps 

reduce uncertainty. 

When applied to business, signaling theory clearly explains how companies convey information about their 

value, quality, and intentions to other agents, such as investors, customers, and regulators. The premise upon which 

it rests is that factors considered "credible" cannot be easily faked or replicated—in other words, they are costly or 

difficult to mimic. They are, therefore, effective signals of the traits that define a company. For instance, those 

engaged in environmentally friendly practices when managing their organizations communicate to stakeholders 

that they are sincere in their stewardship responsibilities. In contrast, favorable or accurate signals can create trust 

and a positive brand image, while negative or vague signals, such as greenwashing, can harm the business's brand 

image. 

Information asymmetry is best explained by signaling theory, primarily when consumers or investors cannot 

physically assess the quality or ethical level of specific products from certain firms or companies. In such situations, 

organizations employ various forms of signaling, like certification labels, third-party endorsements, or sustainability 

reports, to express their adherence to various values, one of which is environmental sustainability. Connelly, Certo, 

Ireland, and Reutzel (2011) noted that signaling is pivotal in reducing information asymmetry and developing trust 

between the firm and its external stakeholders. 

 

3.3.2. Application to Greenwashing Practices in FinTech 

Signaling theory is of great significance in the FinTech industry for understanding how companies can 

communicate their environmental and sustainability information to interested stakeholders. Like most other 

industries, the FinTech industry operates in a world where stakeholder entities with interests in the sector, 

including clients and investors, are becoming more conscious of sustainability. This concern creates a powerful 



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incentive for corporations to establish credibility by demonstrating their commitment to sustainable development 

strategies, which can be done through advertising, a specific logo, or sustainability reports. 

However, when such signals are false or lack objective support in the corresponding actions, they become 

greenwashing. ‘Greenwashing’ is a process where an organization makes a product appear more environmentally 

friendly than it actually is, using fake signs and signals meant to attract environmentally concerned consumers and 

investors. For instance, a FinTech company may claim that their services are ‘green’ or ‘sustainable,’ while the 

activities, products, or services they provide do not necessarily support the environment. This can involve general 

and unsubstantiated statements about reducing carbon emissions, generating energy from renewable sources, or 

sponsoring environmental programs without providing specific or provable information. 

When applying signaling theory to greenwashing in FinTech, several problematic aspects can be identified. 

First, it shows that due to information asymmetry, companies can deliberately transmit misleading or exaggerated 

signals about their sustainability efforts. For instance, a study by De Freitas Netto et al. (2020) revealed that about 

a quarter of the sustainability-based claims made by firms across all sectors, including FinTech organizations, were 

misleading or false. This poses a significant danger to stakeholders, especially those who rely on these signals in 

their decision-making processes. 

Second, weak or false signals discourage trust and introduce pseudo-signaling, which, in theory, aims to reduce 

uncertainty and increase trust. When greenwashing occurs, FinTech firms not only suffer reputational losses but 

also undermine the credibility that stakeholders have in the FinTech sector. This is particularly worrisome, given 

that FinTech firms depend on customer loyalty, underpinned by trust, and investor confidence, which is key to their 

growth and sustainability. Seele and Gatti (2017) found that consumers are concerned about the impact companies 

have on the environment, and 64% of them stated that if they are given false information by a company, they will 

stop buying its products. This means that the impacts of greenwashing can be severe, potentially costing a firm 

customers, investors, and triggering fines, among other consequences. 

However, applying signaling theory in this context, it is understood that the effectiveness of signals means that 

signals should be costly or difficult for potential rivals to imitate. In the case of greenwashing, however, firms might 

employ low-cost, easily imitable signals such as window dressing, sloganizing, or making tokenistic promises of 

‘going green’ that do not reflect the true environmental impact. This not only misleads stakeholders but also leads 

to increasing doubt about corporate announcements on sustainability. This view is also supported by Seele and 

Gatti (2017) who pointed out that greenwashing contributes to what they refer to as the ‘legitimacy gap,’ where 

stakeholders become skeptical of any environmental claims, making it difficult for genuinely green firms to 

distinguish themselves. 

Accordingly, to avoid tarnishing their green image as a signal and suffering the negative consequences 

associated with greenwashing, FinTech firms should consider signaling theory by offering meaningful, credible, and 

concrete signals of their sustainability initiatives. This may involve seeking third-party certifications, preparing 

sustainability reports that include measurable results, and publicly reporting on sustainability ideologies and 

practices. In this way, companies can improve their legitimacy, gain trust from stakeholders, and build long-term 

partnerships. 

 

3.4. Institutional Theory 

3.4.1. Explanation and Relevance to Greenwashing in FinTech 

According to institutional theory, organizational structures, processes, and activities are shaped by the external 

context, which includes the culture, laws, and norms prevailing in a given society. This theory suggests that 

organizations engage in institutionalization by adhering to the laws and regulations of the institutional context in 

which they operate. In the context of FinTech, institutional theory is appropriate as it highlights how companies 



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may choose to provide greenwashed solutions to clients due to society’s increasing sensitivity to environmental 

factors. 

Greenwashing in the FinTech sector can be defined as one of the mixed strategies that reflect the growing 

institutional pressure on companies to operate sustainably. Especially in a world where environmental issues are 

becoming more prominent, there is increasing pressure from customers, shareholders, authorities, and other 

stakeholders to be environmentally conscious. This is particularly important for FinTech companies that 

deliberately promote themselves as innovative and cutting-edge in their business approach, as they may feel 

pressured to demonstrate their commitment to sustainability to gain credibility and competitive advantage. 

However, when sustainability efforts are expensive or difficult to implement, this may lead to false reporting, where 

organizations appear more environmentally conscious than they are, a practice known as greenwashing. 

This behavior stems from a tendency to transform the business without making significant changes to fit 

institutional standards. For instance, a FinTech firm might market its products as sustainable or carbon-neutral 

without providing clear evidence to support these claims. Lyon and Maxwell (2011) suggest that this occurs, mainly 

because no specific rules or international laws define what it means for a firm to be environmentally conscious, 

allowing firms to stretch the truth. 

 

3.4.2. Institutional Pressures and Responses 

External pressures may be set by regulation and legislation, be self-regulatory, stem from customer demand for 

sustainable products, or result from emerging social norms that FinTech organizations need to meet. These 

pressures can be categorized into three types: coercive isomorphism, normative isomorphism, and mimetic 

isomorphism. 

Coercive pressures refer to formal social norms and legislation governing how firms achieve environmental 

performance. Over the last few years, there has been a rising trend in legal policies aimed at eliminating 

greenwashing. For example, the Sustainable Finance Disclosure Regulation (SFDR) for the European Union 

requires investment firms and FinTech companies to report how sustainability factors are integrated into 

investment analysis, recommendations, and financial product provision (European Commission, 2021). 

Noncompliance with such laws may lead to legal consequences and loss of reputation, forcing companies to either 

genuinely improve their sustainability profiles or, in some cases, creatively greenwash to meet the letter of the law 

without incurring the costs associated with the spirit of the law. 

External normative and implementing pressure is based on industry norms, professional communities, and the 

requirements of key customers and investors. As environmental consciousness becomes a policy factor for these 

stakeholders, FinTech firms are under increased pressure to professionalize their environmental policies. A survey 

by GlobalData (2022) indicated that 78% of consumers in the global financial services industry expect firms to 

engage in active environmental sustainability. To satisfy such expectations, some FinTech firms may announce 

green certifications or participate in sustainability schemes, even if their operations do not fully align with their 

claims. 

Mimetic pressures relate to the pressure organizations experience to imitate the practices of other 

organizations in the same sector they admire. In the case of FinTech, some may resort to greenwashing to follow 

rivals they consider leaders in sustainable development. This can lead to a ‘window-dressing’ strategy, where 

organizations implement superficial environmental strategies to avoid being seen as the ‘odd one out.’ However, the 

danger is that this situation can lead to the standardization of greenwashing practices, blurring the distinction 

between genuinely environmentally conscious companies and those merely faking sustainable practices. 

Finally, various responses from FinTech companies to institutional pressures are possible. While some 

organizations may genuinely incorporate sustainability into their operations, others may engage in greenwashing 

as a cheaper way of responding to institutional demands. The challenge for regulators, consumers, and investors is 



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to find ways to differentiate between these responses and ensure that companies are held accountable for these 

environmental wake-up calls. 

 

4. GREENWASHING IMPACT ON FINTECH  

4.1. Environmental Impact 

Greenwashing in the FinTech sector has negative environmental consequences because it contributes to the 

whitewashing of sustainable efforts and the fight against climate change. Misleading stakeholders about 

environmental benefits can lead to socio-ecological stagnation, where consumers and investors perceive progress 

toward sustainability, even when little to no positive environmental change is actually occurring. 

The adverse effects of greenwashing are most likely felt because it raises awareness and funds for practices that 

are not environmentally friendly. For instance, if a FinTech company claims that its products are financing 

renewable energy projects but, in reality, these projects are negligible or nonexistent, it displaces capital from other 

impactful environmental initiatives. Global Sustainable Investment Alliance (GSIA) (2022) shows that global 

sustainable investment amounted to $35 trillion during that period. According to the UN, about $3 trillion was 

invested in sustainable assets in 2021 alone. However, greenwashing, which involves making a product seem eco-

friendly when it is not, also exists, leading to a tendency for a portion of this funding to be channelled to firms that 

need to prioritize environmental interests, thus undermining sustainability genuinely. 

Additionally, greenwashing worsens the state of the environment as companies can continue their harmful 

environmental practices while falsely claiming to be environmentally friendly. For example, a FinTech company 

that acknowledges the importance of carbon offset programs may falsely claim their programs are highly effective, 

thus avoiding more significant changes. This maintains the company's negative impact on the environment and 

contributes to the declining credibility of sustainable practices within industries. 

Greenwashing also discourages environmental innovation because protecting the environment is not the 

primary motivation for these firms. Some companies choose low-level green strategies that are easily implemented 

and cheaper than genuinely committing to environmental improvement, thus gaining a competitive edge over true 

ecological improvement efforts. This can hamper the development of innovative technology and practices that are 

environmentally friendly, leading to slower progress in environmental sustainability within the FinTech domain. 

 

4.2. Social Impact 

The influence of greenwashing in FinTech is social because it affects various aspects of relationships between 

firms and key stakeholders such as clients, workers, and the public. Trust is an essential aspect of financial services, 

and the more FinTech companies engage in greenwashing, the more negative implications arise. 

The most severe social effect of greenwashing is the potential for the general public to lose trust in 

organizations. Today's consumers are increasingly conscious of their consumption patterns' impacts on the 

environment and society. According to a report by Lim et al. (2023) 81% of global consumers believe companies 

should play a role in improving the environment. When consumers discover a company they engage with is 

involved in greenwashing, their emotions are likely to be negative, leading them to sever ties with the company, 

resulting in customer loss and reputational damage. The public loses trust in that company, which may take a long 

time to regain, which is detrimental to its reputation. 

Greenwashing also hurts employee morale and engagement. The values and motives of a company in the 

FinTech industry influence employee motivation. According a to Deloitte (2021) survey, 49% of millennials and 

44% of Gen-Z employees rejected jobs where their employer's values did not align with theirs. When employees 

discover that their company is less environmentally conscious than it claims to be, this leads to demotivation, lack 

of commitment, and high turnover rates. This affects the company's organizational culture and hinders the process 

of attracting and managing human capital. 



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       Lastly, greenwashing can cause consumers, employees, and society to lose faith in efforts to address 

environmental and social issues by promoting a misleading image. When organisations implement fake or 

misleading sustainability practices, public doubt often follows. This can prompt society to become sceptical of 

sustainability disclosures from corporate organisations, leading to setbacks in addressing issues like climate change 

and social justice. 

 

4.3. Economic Impact 

The problems of greenwashing in the framework of FinTech are diverse, as discussed below, and influence not 

only FinTech companies but also the overall financial system. At an organizational level, greenwashing costs 

businesses significant fines, lawsuits, and reputational damage and invites strong criticism. While several new 

standards in ESG disclosures have been emerging globally through accreditation authorities such as the U.S. 

Securities and Exchange Commission (SEC) and the European Union, companies involved in greenwashing are now 

more vulnerable to legal consequences, including fines. For instance, in 2021, the SEC Climate and ESG Task 

Force began cybersecurity probes on firms over greenwashing, exposing the real monetary dangers linked with 

such practices (U.S. Securities and Exchange Commission (SEC), 2021). 

Some ways greenwashing causes business organizations to lose their reputation include customer turnover and 

decreased market share. A study conducted by the Harvard Business Review in 2022 revealed that businesses 

indicted for greenwashing suffered an average erosion of brand value of 2%. After a year, the long-term effects on 

brand identity can affect an organization's sales, profits, and shareholder value. 

Further, greenwashing creates a scenario where word-of-mouth communication interferes with market signals, 

leading to the misallocation of capital. Investors who follow false signals may invest in companies that do not 

contribute to environmental or social sustainability goals, thereby misallocating resources. This can impact the 

economy as funds that could be used for sustainable projects are instead directed to these deceptive firms. In a 

report by Morningstar (2023) global sustainable fund flows reached $3.30 trillion for the first time in 2022. Still, 

the issue of greenwashing remains prevalent in such investments, leading to increased negative impacts on 

sustainability. 

Lastly, the risk of greenwashing poses a systemic threat to the financial sector as it fosters misleading imagery 

and complacency towards environmental degradation. With the growing market size in sustainable finance, the 

industry's credibility is anchored on the truthfulness of sustainability claims made by firms. The failure to practice 

genuine sustainability in green finance can negatively impact consumer confidence and may lead the market to 

correct the situation or even experience a crisis. Both outcomes could result in significant economic shocks to 

individual firms and the overall financial system. 

 

5. CASE STUDIES  

5.1. Greenwashing in Digital Banking 

By establishing a clear reference framework, green bonds can help reduce the risk of greenwashing and direct 

funding toward environmentally sustainable projects. The authors also mentioned the difficulties that issuers, 

investors, and intermediaries face as the green bond market expands (Galletta, Mazzù, Naciti, & Paltrinieri, 2024). 

A working group has been formed by the International Organisation of Securities Commissions Organisation 

(IOSCO), which represents 90% of global public market security regulators, to develop climate disclosure indicators 

for publicly traded corporations. Metrics for climate disclosure are important and necessary to support boards and 

other stakeholders in evaluating the possibilities, risks, and climate performance of their companies (Grove & 

Clouse, 2021). Banks engage in greenwashing for several reasons. The need to satisfy ESG standards and show a 

commitment to sustainable finance is one of the primary causes. Banks may influence their decisions to embrace 

more environmentally sustainable models by providing funding for the economy. Therefore, to minimise moral 



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hazard attitudes, banks need to implement control and verification systems to guarantee that the money given to 

businesses for genuine eco-sustainable operations is used for such objectives (Galletta et al., 2024). In a striking 

illustration of major banks' greenwashing, compare their targets for climate finance to the overall amount of money 

they will be funding fossil fuel companies between 2016 and 2020. The top four fossil fuel financing banks in the 

world, all American banks, plus the British bank Hong Kong and Shanghai Banking Corporation (HSBC), which 

ranked thirteenth in the study, are reflected in the above list of the five banks' climate finance targets as follows: 

$316.7 billion is held by JPMorgan Chase, $237.5 billion by Citigroup, $233.3 billion by Wells Fargo, $198.5 billion 

by Bank of America, and $110.8 billion by HSBC (Grove & Clouse, 2021). The global green bond indices are 

currently created by Solactive, Barclays, Morgan Stanley Capital International (MSCI), Standard & Poor's, and 

Bank of America Merrill Lynch. However, the European Union just unveiled the EU Taxonomy, a unified 

categorisation system for economically viable, ecologically friendly activities. This is one of the most important final 

phases since it will provide investors with a sense of security, stop greenwashing, lessen market fragmentation, and 

focus investments where they are most needed (De Lucena Barreiro, 2023). Kenya has worked hard throughout the 

years to adapt the nation's plans, policies, initiatives, strategies, and programs to combat climate change. Kenya is a 

signatory to the Kyoto Protocol, the Paris Agreement, and the UN Framework Convention on Climate Change. 

Kenya is dedicated to its sustainable environment program, even if the government is aware that there aren't 

enough public resources to support these eco-friendly projects. Banking organisations have been pushed by the 

Kenya Bankers Association, a governing body for Kenya's commercial banks, to encourage green investments in 

collaboration with other organisations (Wabwile, 2023). 

  

5.2. Blockchain and Green Claims 

Varavallo, Caragnano, Bertone, Vernetti-Prot, and Terzo (2022) offer a green blockchain-based traceability 

technology that uses less energy and saves money when used in the Fontina Protected Designation of Origin 

(PDO) cheese supply chain. This platform is a part of the EU-funded "Typicalp" project. The suggested traceability 

solution is built on top of the Algorand Blockchain, a highly scalable and ecologically friendly consensus mechanism 

that leverages Pure Proof-of-Stake. Along with the economic and environmental advantages, the traceability 

platform that was established has allowed for the digitization of the whole production chain. This has resulted in 

data that is both immutable and readily available in real-time to operators of the Fontina consortium and ultimate 

consumers. Mercuri, della Corte, and Ricci (2021) carried out research using the CAOS ("Characteristic, Ambience, 

Organization, Start-up") model on a start-up named Devoleum that operates in the agri-food industry but has not 

yet been institutionalized. The findings show that the application of blockchain can improve sustainability by 

enabling information traceability, protection, and non-manipulability—features that are very helpful in the agri-

food industry. Additionally, the lack of middlemen in blockchain technology lowers transaction costs and shortens 

the time needed to stabilize relationships between the business and the environment. Alzoubi and Mishra (2023) 

found and spoke about 23 BC platforms that make green or environmental claims. The Renewable Energy 

Certificate Mechanism, BFCF, the Green Digital Finance Alliance, the Crypto Climate Accord, the Clean Energy 

Buyers Association, ReGal 38183, Treelion, Chimpzee, Green Technology Asia, Tomorrow, GreenTrust, Ecoterra, 

the BC Climate Institute, the Global BC Business Council Sustainability Working Group, and the Energy Web 

Foundation are some of the initiatives that are part of this series. Solarcoin, the Renewable Energy Certificate 

Mechanism, BFCF, the Green Digital Finance Alliance, the Crypto Climate Accord, the Clean Energy Buyers 

Association, ReGal 38183, Treelion, EFFORCE, Chimpzee, Earth Day, GreenTrust, Ecoterra, the BC Climate 

Institute, the Global BC Business Council Sustainability Committee, and the Energy the World Wide Web 

Foundation are a few of these initiatives. Maersk Line, a logistics firm, and International Business Machines (IBM) 

Corporation, a global information technology corporation, collaborated to build TradeLens, a platform based on the 

blockchain ecosystem. To create an ecosystem that is connected from beginning to finish and includes all 



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participants in the global supply chain, including shippers, cargo owners, airports, and carriers, TradeLens is a 

leading blockchain-based platform ecosystem in the shipping sector (Jovanovic, Kostić, Sebastian, & Sedej, 2022).  

 

5.3. InsurTech and Environmental Promises 

InsurTech refers to businesses that use technology innovation to provide insurance services. They can provide 

a wide range of insurance products, including life, health, rent, and housing insurance. FinTech businesses in the 

insurance industry employ data analytics to strive for a more direct interaction between the insurer and the 

consumer (Puschmann, Hoffmann, & Khmarskyi, 2020). Yolo, which stands for You Only Live Once, was 

established in late 2017 and is the first Italian InsurTech company with an international reach that specialises in 

digital insurance broking services. It facilitates pay-per-use and on-demand underwriting of products from large 

insurance companies and serves as a technology facilitator for other parties interested in selling digital insurance 

solutions because of its unique platform (Puschmann et al., 2020). There are only two InsurTech businesses out of 

the twenty-two that were found to be FinTechs after a thorough examination of the startups using the five 

criteria—provider type, interaction type, direct financial processes, indirect financial processes, and SDGs—was 

conducted. The majority of startups facilitate investment procedures (15), which are followed by cross-process, non-

life insurance (2), payments, advice and financing (6), and claims administration (1) in terms of direct financial 

processes. Just seven firms assist financial processes indirectly through other processes, including living and leisure 

(e.g., paying for charging an electric car), shopping and logistics, entertainment and communication, transportation, 

health, and education and work (Puschmann et al., 2020). In addition to being customer-focused, Metromile 

encourages more responsible driving, which has positive social and environmental effects. The product proved to be 

quite successful. A few of the main causes include the following: accurate data collection, data-driven processing 

that proceeds straight through, regular updates to drivers on the timing of significant occurrences, and risk-

reduction strategies. The fundamental characteristics that set these models apart from more conventional models 

are what give them strength; below are some of those qualities that are exclusive to offers and their accompanying 

technological viability (Jha & Sahoo, 2022). 

 

5.4. Mobile Payment Platforms and Green Credentials 

NFC, which enables quick and safe exchange of information between electronic devices, is one of the most well-

known mobile payment systems of engagement paradigms. Numerous Near Field Communication (NFC) payment 

platforms exist globally, including Apple Pay, Cityzi, Google Wallet, OsaifuKeitai, SoftCard, UnionPay, Visa 

Paywave, and MasterCard's Mobile PayPass. In today's fast-paced and transaction-heavy industries, such as 

transportation systems, contactless techniques are effectively implemented (Penttilä, Siira, & Tihinen, 2016). A 

Finnish business called IDcontrol specialises in structural or physical identification. To improve a company's 

security, IDcontrol offers visitor management, access control, and ID tools. In the PACE business case, IDcontrol 

sent the credential—access privileges in this case—to the client's phones by air delivery. Key management is a huge 

task, particularly for hotels but also for cottage rentals. All-access system administration may be essentially 

automated if the system can provide access privileges directly to the customers' phones, allowing the unlocking of 

certain locks during the allotted time (Penttilä et al., 2016). Apple has often stated in its Environmental and 

Responsibility Reports that all of the energy used in its data centres and corporate offices globally is derived from 

renewable sources, accounting for over 90% of the energy used in the US (Monyei & Jenkins, 2018). The Chinese e-

commerce behemoth Tencent Group and Asset Bright Company, which is listed on the Thai stock exchange, have 

partnered to enable WeChat payments that may potentially increase Chinese visitors' spending in Thailand. 

Additional files have been submitted to the BOT by Asset Bright and The Drop. WeChat invites local vendors to 

apply to become one of its 3,000–5,000 target suppliers. 



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       Since WeChat is the most popular mobile application among the Chinese, merchants who are interested in 

accepting money from this payment service must have a bank account. Additionally, clients are Thai Chinese 

tourists who must get in touch with Asset Bright to confirm their identification. The payment mechanism functions 

similarly to that of credit CARDS, which retailers may obtain the next day (Feng, 2020). A well-defined plan is 

necessary to maintain competitiveness and enhance sustainability as client demands change. The essential element 

of Fintech services that allows users to buy using smartphones is mobile wallets. Though much study hasn't been 

done in this area, the use of mobile wallets in retail and e-commerce has begun to rise. Smartphones are an essential 

banking channel due to their simple accessibility and substantial value to clients, made possible by wireless 

connections and the growth of the Internet. M-banking capitalises on the growing trend of smartphone use and 

drives the need for mobile wallet services among social consumers and retailers (Hopalı, Vayvay, Kalender, Turhan, 

& Aysuna, 2022). 

 

5.5. Robo-Advisors and Sustainable Investment 

Robo-advisors are online investing services that are entirely automated and available to both institutional and 

private customers. This service's usage of artificial intelligence and mathematical algorithms for client advice are its 

distinguishing features. The online service does this in an attempt to mimic and even exceed human service (Au, 

Klingenberger, Svoboda, & Frère, 2021). The first robo-advisers were introduced by Phoon and Koh (2018). 

Numerous more robo-advisers have now entered the market, and after 10 years, robo-advisors managed $200 

billion in assets globally, and all indications point to continued expansion (Iperen, 2024). The majority of robo-

advisors choose and invest in stocks and bonds on their own. There are instances in which a single stock sector is 

heavily invested in and divided up. The other two businesses invest in less than ten assets, whereas Schwab 

Intelligent owns about thirty assets. Specifically, when utilising robo-advisors, all three of these organisations 

invest in international bonds. The three firms' asset allocations differ slightly in that Wealthfront and Schwab 

Intelligent invest in resources like gold and associated exchange-traded funds (ETFs). Improvement may be viewed 

as deficient from the standpoint of variety (Park, Ryu, & Shin, 2016). One further feature shared by all three robo-

advisors is their investment in US corporate bonds, which carries three different kinds of risk: call risk, liquidity 

risk, and credit risk. Among corporate bonds, Schwab Intelligent specifically makes investments in high-yield 

bonds. 

High-yield bonds are not often traded since their transaction costs are greater than those of conventional bonds 

(Park et al., 2016). The registered investment advisors (RIAs) that collaborate with Fidelity, an American holding 

company that is among the biggest asset management firms globally, and TD Ameritrade Holding Corporation, an 

American business that established an electronic trading platform, are called FutureAdvisor. The investment 

assessment tool provided by this RIA is trustworthy. Users can link their current investment accounts to the 

system at no cost. Based on productivity, diversification of operations, compensation, and taxes, it evaluates the 

viability of investments. Additionally, advice on modifying the investor's allocation of assets may be offered by this 

product. 

 

5.6. Peer-to-Peer Lending Platforms and Environmental Impact 

The platform often acts as a middleman between the customer and the business owner, charging a commission 

to one or both trading parties. When it comes to peer-to-peer lodging, for instance, platforms such as Airbnb and 

Vacation Rentals by Owner (Vrbo) exist; individuals who offer their homes for short-term rentals are known as 

entrepreneurs, and those who rent from them are known as consumers. When it comes to peer-to-peer car rentals, 

Getaround and RelayRides are platforms; entrepreneurs are those who offer their vehicles for short-term rentals, 

and consumers are those who rent from these entrepreneurs. New methods of offering recognisable, "real world" 

services, such as short-term lodging (Airbnb, Couchsurfing), urban transportation (Lyft, Sidecar, Uber), and 



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venture capital (Indiegogo, Kickstarter, Rockethub), are commonly included in the emerging peer-to-peer 

enterprises (Sundararajan, 2014). The founding of two businesses—the US-based Prosper in 2006 and the UK-

based Zopa in 2005—is when P2P in finance first emerged. Both made peer-to-peer lending possible, allowing 

lenders and borrowers to transact with one another directly through a central marketplace instead of going through 

banks. "eBay for Credit" is how Prosper's co-founder Chris Larsen referred to his company's product (Milne & 

Parboteeah, 2016). The amount and distribution of the investors' capital in the platform are essentially determined 

by them. In Australia, the lender often determines other factors such as the amount and interest rate to invest in 

rather than the particular loans. After that, the platform functions as a matchmaker by matching the money with a 

borrower. There is some variation in this business model based on the degree of freedom provided to lenders. For 

example, RateSetter Australia requests the investment amount, length of holding, and preferred interest rate when 

offering loans in the Green Loan lending market, which covers loans for renewable energy (Lejcak & Wiltshire, 

2016). The top peer-to-peer lending platform in Europe for investing in different kinds of loans is called Mintos. 

The platform's funding volume in the past has been €9.5 billion, and as of November 2023, there were 400 million 

euros in outstanding loans. In this scenario, Mintos serves as the technological middleman, providing a marketplace 

platform to create bilateral network effects. Lending institutions that collaborate with the platform represent one 

side, while investors who are prepared to put money into the suggested loan options represent the other. Lending 

businesses manage loan origination and debt collection; Mintos does not provide loans to borrowers (Manavoglu, 

2023). 

 

5.7. Crowdfunding Platforms and Green Initiatives 

Crowdfunding platforms, like Kickstarter and Indiegogo, allow businesses to directly appeal to a vast number 

of potential investors, many of whom are avid tourists and locals, therefore increasing access to finance for a wider 

spectrum of individuals. Involvement in the community and shared ownership are encouraged, which might boost 

customer loyalty and brand support (Baber, Kaluvilla, & Ramkissoon, 2024). Because crowdfunders that employ a 

keep-it-all financing model can keep all contributions from the crowd, regardless of the campaign's outcome, the 

Indiegogo platform symbolises a signalling environment with greater uncertainty. Since donations to Indiegogo 

projects go to entrepreneurs even if they are underfunded, the public may view these initiatives as riskier because of 

the increased likelihood that the project would not be completed. Because donations are only given to entrepreneurs 

if they reach their fundraising goals, the Kickstarter platform creates a signalling environment with less ambiguity 

(Huang, Pickernell, Battisti, & Nguyen, 2022). GoFundMe projects span a wide range of topics, but the largest 

category, and one-third of all funds donated on the platform in 2017, were medical campaigns. GoFundMe allows 

users to build and publish campaigns in a matter of minutes. GoFundMe allows users to build and publish 

campaigns in a matter of minutes. GoFundMe provides ideas for raising money while you're building up your 

solicitation page. It is highly recommended for campaigners to link to their Facebook profile and promote their 

campaign on social media so that supporters can confirm who is generating the money. For the campaign's primary 

body, GoFundMe also suggests using a narrative framework (Klein, Tran, & Riley, 2020). The biggest membership 

network, Patreon, facilitates the payment of nearly $1 billion to creators yearly and links millions of creators with 

millions of fans. Since Patreon launched creator-fan memberships in 2013, many new membership sites, like Ko-fi, 

OnlyFans, and BuyMeaCoffee, have appeared. Due to the popularity of this membership model, already existing 

social media platforms have begun to include subscriptions into their networks. Examples of these are Twitter 

SuperFollow, Facebook Subscriptions, and YouTube Memberships, which allow users to pay a monthly 

subscription fee in exchange for special access (Sanyoura & Anderson, 2022). 

  

 

 



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6. STRATEGIES TO REDUCE GREENWASHING  

6.1. Regulatory Frameworks 

Corporate greenwashing has a variety of negative effects on the environment, society, and economy. Sincere 

environmental efforts are undermined by corporate greenwashing, which erodes public confidence and legitimacy. 

For firms to support sustainable development, trust must be rebuilt. Since businesses spend more money creating a 

green image than making significant improvements, greenwashing impedes real progress by taking resources away 

from real sustainability activities. To successfully prevent greenwashing, governments and regulatory 

organizations should enhance rules, provide clear criteria for environmental claims, and ensure public reporting to 

hold firms responsible (Maamir, 2024). 

 

6.1.1. Existing Regulations and their Effectiveness 

Ensuring that enterprises and organisations are held responsible for their environmental effect and promoting 

sustainability requires a relationship between governmental institutions, regulations, and certifications. 

Governments and regulatory bodies, for example, have the authority to enact laws and rules requiring companies 

and organisations to adhere to specific sustainability criteria. For instance, a government may mandate that 

businesses lower their greenhouse gas emissions or adopt environmentally friendly land use techniques (Nygaard, 

2023). Mateo-Márquez, González-González, and Zamora-Ramírez (2022) demonstrate that in countries with more 

extensive regulations about climate change and stricter oversight of organisations' compliance with said 

regulations, there will be fewer opportunities for companies to engage in greenwashing when disclosing voluntary 

carbon information. Based on its wide power under Section 5 of the Federal Trade Commission (FTC) Act, the 

Commission pursued enforcement proceedings against deceptive environmental marketing claims throughout the 

1970s and 1980s. Under general policy, the FTC carried out these early enforcement actions gradually, which left 

the business and consumers feeling frustrated. In response to the rising issue of false environmental claims in 

marketing, states simultaneously passed their restrictions, which were enforced in state courts by state attorneys 

general and consumer advocacy organisations. In the end, it became clear from these dispersed initiatives that the 

FTC needed to publish national guidelines for claims regarding the environment in marketing (Rotman, Gossett, & 

Goldman, 2020). The Green Guides are a set of interpretative principles designed to help marketers make ethical 

statements about the environment. They lay forth broad guidelines that apply to environmental claims made in the 

marketing or public sale of goods or services, whether they are related to products, packaging, or services. These 

guidelines lead marketers to Rotman et al. (2020): 

• When making environmental claims, use the proper qualifiers and disclosures. Transparency ought to be placed 

"near the qualified claim," "clear and noticeable," and "in straightforward and inadequate type." Advertisers 

must avoid using distracting elements or making inconsistent claims that might undermine or contradict the 

disclosure." 

• Clearly state if their claim applies to the product as a whole, to a certain part of the goods, or only to the 

packaging.  

• Steer clear of exaggerating environmental qualities or advantages. 

• Verify that assertions made in comparison are precise and supported. 

Cherry (2013) proposed several options to combat greenwashing and fake corporate social responsibility, such 

as filing claims under securities fraud laws, pursuing remedies under false advertising laws, establishing private 

standards through independent groups or other watchdogs, and utilizing the recently formed Bureau of Consumer 

Financial Protection. Few documented instances have been filed based on the premise of fake CSR for deceptive 

advertising, and the ones that have usually included particular product labels that claimed the product was "green." 

For instance, successful lawsuits have been brought against pesticide manufacturers that falsely advertise their 



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products as safe or eco-friendly. Furthermore, lawsuits have been filed based on the usage of terms like 

"biodegradable," "recycled," and "recyclable," all of which have tight legal meanings these days. 

"Natural gas is clean" and "Natural gas is a backup for renewable energy" are two of the most prevalent 

assertions about natural gas that fall under the category of "greenwashing" (ClientEarth Communications, 2021). 

Examining the EU's Taxonomy Regulation and delegated actions is one of the most important legislative processes. 

July 2020 saw the implementation of the EU's Taxonomy, which entails an analysis of present regulations. Its 

foundational idea is to make it possible for society to meet the energy and climate goals outlined in the European 

Green Deal and set for 2030. The European lawmaker believed that these accomplishments could only be made 

feasible by having a clear grasp of the ideas that go into creating the word "sustainable." This led to the creation of 

the EU Taxonomy, a uniform classification scheme for sustainable economic endeavours (Zych, Budka, Czarnecka, 

Kinelski, & Wójcik-Jurkiewicz, 2021). The European Commission has stated that the regulation under 

consideration seeks to achieve six environmental goals: preventing and controlling pollution, promoting the 

transition to a circular economy, protecting and restoring biodiversity and ecosystems, adapting to and mitigating 

the effects of climate change, and sustainable use and protection of water and marine resources. By defining a 

particular list of ecologically sustainable activities, these goals can be accomplished. 

 

6.1.2. Proposed Regulatory Improvements 

• Disregarding the validity of the mounting demands, in addition to positive environmental initiatives and 

actions like the advancement of renewable energy, the creation of sustainable urban planning (smart cities), or 

national commitments to cut greenhouse gas emissions within a given period, negative mechanisms like 

greenwashing are also beginning to emerge (Zych et al., 2021). 

• It should be emphasized that preventing greenwashing techniques by giving lawmakers, investors, and private 

parties precise guidelines on what constitutes sustainable operations is one of the primary goals of this 

certification system. These endeavours aim to appropriately focus on two things: private investment (for 

investors and other private players) and maybe governmental subsidies or other types of assistance (for 

lawmakers). 

• It is important to acknowledge that, despite the examination of the regulator's actions through the lens of 

greenwashing, such regulation, particularly when aimed at influencing private entities' actions, may 

inadvertently foster the proliferation of greenwashing activities within the market. 

• Gatti, Seele, and Rademacher (2019) suggest that a mix of required and voluntary measures might be a better 

way to stop greenwashing. The new paradigm should encourage innovative and successful corporate social 

responsibility (CSR) activities while also defining the boundaries and guidelines for their implementation and 

dissemination, as companies run the danger of breaking the law by overstretching their CSR messaging.  

• Amendments do not and ought not to shield corporate actors from liability for making untrue or deceptive 

claims about how their operations would be affected by climate change, how their company will be affected by 

it, or about their plans and commitments on climate change (Shanor & Light, 2022). 

• Additionally, it would be beneficial if the Green Guides addressed and standardized the kinds of research and 

methods that are allowed to back up certain assertions. Should a lifecycle evaluation be carried out by the paper 

business itself, by outside scientists, or by firm staff on behalf of industry associations? Which, if any, 

statements need to be supported by research that adheres to particular criteria—like being double-blind or 

randomized controlled trials, for example? Which of these data should be available to scholars, decision-

makers, and the general public, and which, if any, must be reported to the FTC (Shanor & Light, 2022)? 

 

 

 



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6.2. Industry Standards and Certifications 

The belief that the organizations responsible for determining whether a certifying organization is appropriate 

are reliable, competent, and trustworthy in their work is the cornerstone of institutional trust. To ensure that the 

environmental and social performance they certify is reliable and not dishonest or fraudulent, for example, 

organizations that provide green certifications rely on institutional trust. Although certifications play a major role 

in the global sustainability movement, changing market and technology factors may eventually erode institutional 

trust (Nygaard & Silkoset, 2023).  

 

6.2.1. Role of Industry Bodies in Promoting Transparency 

To promote sustainability and make sure that companies and organisations are held accountable for their 

environmental effect, it is crucial to understand the relationship between governmental institutions, legislation, 

certifications, and the role of NGOs and activist groups (Nygaard, 2023). The foundation of institutional trust is the 

conviction that the entities tasked with identifying the suitability of a certification organisation are trustworthy, 

competent, and dependable in carrying out their duties. As an illustration, organisations that provide green 

certifications depend on institutional trust to guarantee that the environmental and social performance they certify 

is trustworthy and not deceptive or fraudulent. While certifications contribute significantly to the global 

sustainability movement, institutional trust may gradually diminish due to shifting market and technological 

dynamics (Nygaard & Silkoset, 2023). The primary categories of certification schemes that support sustainability, 

such as those based on buildings, organisations, and products. Product-based certifications concentrate on assessing 

the economic, social, and environmental effects of a single product or set of related items. Building sustainability, 

encompassing the effects of construction and operation on the environment, society, and economy, is the focus of 

building-based certifications. Buildings may have a substantial influence on people's health and well-being and are 

important sources of energy consumption and greenhouse gas emissions, which makes these certifications essential. 

A certification for green buildings called Leadership in Energy and Environmental Design (LEED) is an example of 

a certification based on a building (Nygaard, 2023). According to Whelan and Kronthal-Sacco (2019) the Fair Trade 

certification attests to the fact that a product has been manufactured and traded in an ecologically and socially 

responsible manner and that workers have received fair remuneration. Labelling requirements depending on the 

proportion of organic materials in a product are also part of the National Organic Program (NOP) rules. The 

USDA may suspend or cancel organic certificates under the NOP and levy civil fines for violations. In a poll 

conducted by the Organic Trade Association (OTA), 60% of respondents strongly agreed, according to Angela 

Jagiello, Associate Director of Conference and Product Development. "A certification process such as the USDA 

uses to oversee and enforce the labelling of organic foods should also be used to cover (Rotman et al., 2020). 

 

 6.2.2. Importance of Certifications and Third-Party Audits 

Certification programs influence the creation of new rules and regulations. For instance, the Forest 

Stewardship Council's (FSC) certification program for sustainable forestry has impacted the creation of legislation 

and policies about the practice in several nations. These certifications are crucial because they empower companies 

to enhance their sustainability practices and assist customers in making better decisions about what to buy 

(Nygaard, 2023). Public consequences are not a sufficient basis for self-regulatory norms such as codes of conduct or 

private business efforts. Finding ways to encourage compliance is therefore essential. In this regard, as covered in 

the previous chapter, scholars that study greenwashing add to the discourse by pointing out various strategies and 

actions (like tripartism, public enforcement of anti-greenwashing laws, and litigation about certification mark 

infringement) that reduce greenwashing and guarantee more equitable and transparent corporate social 

responsibility (CSR) communication (Gatti et al., 2019). Leadership in Energy and Environmental Design (LEED) 

certifies low-energy buildings, makes use of sustainable materials, and benefits the environment and their 



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occupants. The WELL Building Standard certification for healthy buildings encourages healthy indoor 

environments by taking into account elements like air quality, lighting, and ergonomics (Nygaard, 2023). The 

outcomes of public enforcement against greenwashing are superior to those of private enforcement of 

environmental marks or consumer activities. The most effective defences against the inappropriate use of eco-marks 

appear to be government agency investigations and certification mark enforcement lawsuits (Gatti et al., 2019). 

According to research conducted in China based on interviews with senior quality managers, consultants, and 

auditors, obtaining certification through the use of phoney ISO 9001 certifications and a dubious evaluation 

methodology is a common practice (Heras‐Saizarbitoria, Boiral, & Díaz de Junguitu, 2020). Seele and Gatti (2017) 

acknowledge that greenwashing is a subjective phenomenon, which is another essential feature of the problem. No 

matter how much corporate CSR advertising is untrue, greenwashing only occurs, according to the authors, when a 

message is emphasised as such by NGOs, the press, or other interested parties. Kirchhoff (2000) explored a 

greenwashing prevention concept based on adding a punishment to the environmental labelling system. The 

concept needs an impartial third-party labelling authority to function properly, and this authority's existence 

appears to promote CSR standard compliance and reduce greenwashing. Therefore, a crucial component of 

greenwashing is a third-party complaint. 

 

6.3. Corporate Governance and Ethical Practices 

6.3.1. Best Practices for Corporate Governance 

The three main forces that push businesses to participate in greenwashing are individual, 

internal/organisational, and external. Researchers have shown that gaining credibility with stakeholders—also 

known as reputational benefits—is a major external driver behind companies' greenwashing practices. Additional 

external factors include stakeholder pressure from investors, customers, and NGOs, while internal factors include 

"inertia" and a lack of an ethical culture inside businesses (Shanor & Light, 2022). 

The field's adoption of a legal component may reduce suspicion and strengthen ties between institutions and 

the general public. But it necessitates acknowledging that the debate around CSR is expanding beyond management 

and corporate communication to include legal, ethical, and political aspects of business (Gatti et al., 2019). Ethical 

businesses honour their CSR pledges and fulfil their responsibilities. Is it possible to forecast which businesses will 

give in to the allure of greenwashing? There is a spectrum of CSR levels, suggesting that a company has discretion 

over the extent of its CSR activities. Businesses that breach the law or use it as a negotiating chip, paying fines or 

penalties to operate at the edge of what would be considered ultra vires, are at the bottom of these categories 

(Cherry, 2013). Paulet, Parnaudeau, and Relano (2015) examined the moral conundrums that the banking sector 

encountered both during and after the financial crisis, as well as the moral standards that ought to underpin the 

sector. The answers from ethical banks were different in key important ways from those of their conventional rivals. 

Even though they are both governed by the same authorities and function in the same industry, ethical banks are a 

distinctly different kind of financial institution. Unlike activities in secondary stock markets, local lending is the 

main activity of ethical banks. They have been able to weather the recent financial crisis thanks to their banking 

strategy without having to make many major operational changes. Digital technology has changed the work culture 

in the banking industry, and many more traditional banks are finding that they have to reinvent their businesses 

and cultures in order to welcome diversity and inclusion, promote creativity and fresh perspectives, and promote 

openness and new degrees of customer trust. To ensure that their consumers are adequately protected, banks, as 

regulated companies, are also required to closely adhere to "responsible lending practices" in line with the present 

regulatory framework (Prastyanti, Rezi, & Rahayu, 2023). Businesses that put ethics first use eco-friendly practices, 

make investments in renewable energy sources, and maintain open lines of communication. Environmental practices 

must be transparent for ethical corporate decision-making to promote trust and educated decision-making. It 

necessitates taking the long view and taking long-term effects into account. Adherence to environmental rules and 



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regulations is of paramount importance, as proactive sustainability initiatives exemplify moral behaviour. 

Greenwashing impedes sustainable growth and moral business decision-making, whereas businesses that put ethics 

first promote an open and accountable culture (Yoganandham, Kareem, & Khan, 2024). 

 

6.3.2. Encouraging Ethical Behaviour in Fintech Companies 

        Without question, fintech lending has revolutionised the financial sector by offering accessible and practical 

loan solutions to both consumers and companies. But in the case of fintech loans, there are some ethical issues, just 

as in any tech-driven sector. A few significant ethical factors are as follows (Prastyanti et al., 2023): 

• Fintech lending platforms obtain and evaluate vast quantities of financial and personal data to determine 

creditworthiness (Raj & Upadhyay, 2020). Ethical issues surface when this data is not sufficiently protected 

or is utilised for purposes beyond what it was originally intended. Fintech businesses need to put data 

security, encryption, and permission first to preserve people's privacy. 

• Fintech lenders often use sophisticated algorithms and machine learning models to make lending choices. 

The moral conundrum is to guarantee that these models are impartial and fair without supporting 

prejudice based on socioeconomic class, gender, or race (Rovatsos, Mittelstadt, & Koene, 2019). Fintech 

lenders have to follow responsible lending guidelines in order to stop predatory lending. 

• The goal of fintech lending ought to be to advance financial literacy and inclusiveness (Moenjak, 

Kongprajya, & Monchaitrakul, 2020). Additionally, initiatives to involve underserved populations and 

guarantee that fintech financing doesn't worsen already-existing disparities should be undertaken. 

• Legal and financial risks are decreased by making ethical decisions because they guard against the 

consequences of unethical behaviour. By honouring contractual obligations and moral convictions, a 

business can lower its risk of litigation and related expenses, safeguarding its integrity and long-term 

profitability. By placing ethical principles first when making decisions, businesses may develop a culture of 

integrity, responsibility, and sustainability and position themselves as ethical leaders in their respective 

industries (Yoganandham et al., 2024). 

 

6.4. Consumer Awareness and Advocacy 

6.4.1. Empowering Consumers through Education 

Many businesses utilize the practice of "greenwashing," which involves making false claims about sustainability 

in an attempt to deceive customers into buying their products, rather than being sustainable. As a result, customer 

education and awareness became crucial to prevent these deceptive practices used by the companies (Bosch, Obeso, 

& Palao, 2023). It is crucial to keep up the fight against greenwashing, to give clear information, and to empower 

customers with information and education. It supports the idea that fast fashion should be sustainable and that there 

should be a concentrated effort to counteract greenwashing (Mende & Scott, 2013). A key component of raising 

awareness is consumer education. Encouraging customers to make more sustainable purchase decisions and holding 

corporations responsible for their green promises may be achieved through the implementation of educational 

programs, such as master classes and the integration of sustainability education into schools (Bosch et al., 2023). 

There has been a need for increased consumer education on the identification and avoidance of false environmental 

claims in order to tackle the issue of greenwashing (Tang, Shen, & Khachatryan, 2018). However, it is uncertain 

how much it will cost non-financially to educate customers about the issue of greenwashing. Four subnarratives 

separate businesses with good and bad environmental responsibility records, even if the main narrative of consumer 

empowerment remains constant. Though not unique to any one group, in our sample one of the two categories of 

firms uses these subnarratives more frequently and more heavily than the other. More specifically, businesses with 

bad environmental records tend to emphasize the value of charity and scientific advancement, whereas businesses 

with good environmental records emphasize the importance of political action and third-party ecolabels (Jones, 



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2019). Green consumerism promotes environmentally friendly items without sacrificing preferences by giving 

customers the freedom to make knowledgeable decisions regarding both public and private commodities. This 

promotes sustainable habits. It was founded in the 1980s and promotes ecologically friendly companies and goods, 

even if they are more expensive. Some consumers—Gen Y in particular—continue to buy greenwashed items 

despite their mistrust of green promises because of incomplete information and deceptive marketing. By using 

greenwashing, businesses run the danger of losing the confidence of consumers and harming their brand's 

reputation. Businesses should implement clear eco-friendly processes, pursue certification, and effectively convey 

their environmental efforts if they want to attract environmentally sensitive clients. Important insights may be 

gained from market research on greenwashing habits, especially about Generation Y (Wang, Walker, & Barabanov, 

2020). 

 

6.4.2. Role of Advocacy Groups in Combating Greenwashing 

Environmental statements produced by these corporations have been more inflated or inaccurate, according to 

studies, advocacy organisations, and specialists in the financial sector (Ochoa & Holger, 2020). Bingaman, Kipkoech, 

and Crowley (2022) implied that customer awareness and charges of greenwashing might hurt a brand by adversely 

influencing consumers' plans to make purchases. The results of this study should be used by environmental 

advocacy organisations and industry professionals to guide the development of marketing, public relations, and 

advertising campaigns aimed at countering greenwashing. To identify the possible dangers of eco-opportunistic 

conduct, economic actors have tightened their oversight and management of their whole supply chains. Some 

businesses outsource unsustainable portions of their supply chains to grey or even illegal marketplaces, where it is 

difficult and costly to control (Ndubisi, Nygaard, & Chunwe, 2020). Establishing a sustainable corporate 

environment that guarantees future adaptation requires the use of an ESG reporting framework. The increasing 

need for goods and reliable services might also confound the growing tendency of "greenwashing," which is the use 

of marketing techniques and narratives to portray a firm, its goods or services, initiatives, or brand as 

environmentally friendly when they aren't. As more and more people—from investors to employees to visitors—

realise the importance of sustainability and the influence that global business has on sustainability and commercial 

governance, anybody who utilises ESG or sustainability as a mere marketing technique is in danger (Sarda, 2024). 

To counteract greenwashing, stakeholders—including corporations, non-governmental organisations, and 

governmental bodies—must collaborate to develop industry standards, exchange best practices, and hold 

enterprises responsible for their claims. Long-term, systemic changes are necessary for corporate commitment to 

sustainability, and sustainable practices must be prioritised in key business initiatives. This change improves 

competitiveness, strengthens organisational resilience, and helps the environment. In summary, resolving the 

conflict around corporate greenwashing necessitates a thorough strategy including industry cooperation, consumer 

education, and regulatory intervention. Businesses need to understand that genuine sustainability is a basic duty in 

the quest of a positive interaction between industry, society, and the environment, not merely a desirable quality 

(Maamir, 2024). Beyond the surface-level appeal of greenwashing, sustainable development can only be promoted 

by sincere dedication and coordinated efforts. One major problem that has an impact on social, economic, and 

environmental growth is corporate greenwashing. It entails businesses fabricating a false sense of environmental 

accountability, which raises social and environmental dangers. To tackle this issue, regulatory solutions, 

accountability systems, and consumer education are essential. Cooperation is crucial between companies, customers, 

and authorities (Maamir, 2024). 

  

 

 

 



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7. CONCLUSION 

7.1. Summary of Key Findings 

The study is conducted to provide theoretical perspectives and conceptual frameworks related to greenwashing 

in the context of sustainable development and fintech. Its analysis of FinTech's core areas includes a number of 

these areas, each of which adds something special to the field of financial services. Blockchain, crowdsourcing, 

digital banking, peer-to-peer lending, mobile banking, payments, insuretech, and robot advisors are some of these 

fields. The findings show that since FinTech focuses on how technology can be used to develop new solutions to 

economic challenges, it has played a significant role in implementing the Sustainable Development Goals. FinTech 

also promotes environmental conservation and growth as well as financial inclusion. FinTech contributes to 

achieving the SDGs in several domains, including money, the economy, and climate change. FinTech companies can 

reach customers in places where conventional financial institutions are unable to, including rural areas, thanks to 

the use of technology. FinTech innovations such as digital wallets, microfinance, and mobile banking have made 

financial services accessible to millions of people throughout the globe. As a result, the region's economic stability 

and poverty rates have decreased, raising people's standards of living. FinTech can also facilitate the transition to a 

low-carbon economy by helping to fund adaptation and mitigation strategies for climate change. FinTech 

technologies allow organisations to access financing for sustainable development via the use of green bonds, carbon 

trading, and crowdfunding for renewable energy projects. FinTech helps to build sustainable and effective economic 

structures by actively supporting the opening of financial markets, engaging in non-traditional financial innovation, 

and promoting it. FinTech has the potential to contribute to the development of sustainable enterprises and solid 

physical infrastructure by fostering improved resource mobilisation, improving loan availability, and cutting 

transaction costs. 

Moreover, the theoretical perspective shows that stakeholder theory helps identify the roles and effects of 

stakeholders who are either impacted or interested in greenwashing, which is why it is relevant in the context of 

FinTech greenwashing. In their day-to-day operations, FinTech companies also put a lot of work into being leaders 

in sustainable financial solutions. However, the confidence and legitimacy that these companies depend on are 

undermined when they make exaggerated claims about how well they are stewarding the environment. In the case 

of legitimacy theory, the validity of the financial goods and services offered by these firms is predicated on several 

elements, such as their alignment with societal objectives to solve pertinent financial issues, uphold sustainable 

development goals, and respect customers' right to privacy. It will be simpler for these businesses to get traction in 

the market. In the FinTech sector, signalling theory plays a critical role in helping businesses convey information 

about sustainability and the environment to interested parties. Similar to the majority of other businesses, the 

FinTech sector functions in a global context where stakeholders with vested interests, such as investors and 

customers, are more mindful of sustainability. External constraints might come from self-regulation, new laws and 

regulations, consumer demand for sustainable goods, or societal values that FinTech companies must conform to. 

In addition, corporate greenwashing has many detrimental repercussions on the economy, society, and 

environment. Corporate greenwashing damages real environmental initiatives by undermining public trust and 

credibility. Rebuilding trust is necessary if businesses are to promote sustainable development. Greenwashing 

impedes actual progress by diverting resources away from genuine sustainability initiatives, as corporations invest 

more money in projecting a green image than in achieving meaningful changes. Governments and regulatory 

bodies should strengthen regulations, establish precise standards for environmental claims, and guarantee public 

reporting to hold companies accountable in order to effectively combat greenwashing (Maamir, 2024). The 

foundation of institutional trust is the conviction that the entities tasked with evaluating the suitability of a 

certifying organisation are dependable, capable, and trustworthy in their job. For example, organisations that issue 

green certifications depend on institutional trust to guarantee that the environmental and social performance they 

certify is trustworthy and not dishonest or fraudulent. While certifications are crucial to the global sustainability 



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movement, institutional trust may ultimately be undermined by shifting market conditions and technological 

advancements (Nygaard & Silkoset, 2023). 

  

7.2. Future Research Directions 

7.2.1. Emerging Trends in Fintech and Sustainability 

      A growing number of emerging issues that impact financial management are appearing these days. These are 

the results of increased consumer concerns about environmental sustainability and respect in the products and 

services they buy and use, along with the acceleration of digitalisation. Environmental, social, and governance 

(ESG) considerations and corporate social responsibility (CSR) are two significant instances of these challenges. In 

a similar vein, the United Nations' 2030 Agenda for Sustainable Development Goals (SDGs) is crucial to the fight 

against climate change. Green innovation, as a novel technology paradigm, has promise for lowering resource use 

and raising resource efficiency. To achieve the carbon peak target by striking a balance between environmental 

conservation and economic development, green innovation is essential. Building capacity is necessary for regulators 

to assess whether a bank is operating sustainably. Furthermore, the bulk of institutions lacked sustainability 

policies, and only a small number of banks produced sustainability reports. Sustainable investment has to be a 

fundamental principle and guiding concept in any company's day-to-day operations. Adopting sustainable banking 

practices may lead to the banking sector being sustainable. The regulator must keep an eye on how sustainability is 

being applied. It is critical to take into account other strategies in this case as well, such as assessments of the 

strategic implications of poverty, legislation, sustainability, and the environment. Based on their capacities, these 

instruments need to be employed to evaluate each bank's advancement toward climate finance and sustainable 

banking. It would be essential to examine various instances of sustainable fintech and identify their shortcomings in 

order to provide fresh approaches for improvement. Additionally, to implement all of these steps, a strategy must be 

created for each platform. 

  

7.2.2. Interdisciplinary Approaches 

       Within the explanation of each subject above, there are several potential areas for further study. Many of these 

topics are included in the core areas of fintech, which served as the primary focus of our study. Subsequent studies 

could investigate within-group disparities in non-G7 nations according to a range of classifications, such as political 

structure, economic standing, performance, and sources (e.g., level of reliance on foreign trade), predominance of 

specific industry clusters (e.g., manufacturing, services, technology, mining), types of organisations (e.g., state-

owned, family enterprises, MNCs, etc.), social stratification, etc. Every one of these would be a multi-layered, nested 

design study that takes into consideration a range of contextual elements that are included as concentric variables 

and have an impact on how sustainability discourse and practice evolve in each environment. To establish strategies 

for reaching a wide agreement on sustainability reporting standards and indicators, it is important to comprehend 

these disparities. Future researchers can also highlight the challenges and obstacles faced by the different 

organisations when trying to mitigate greenwashing. Subsequent investigations need to aim to broaden the field of 

inquiry by including monographs or book chapters, which were not taken into account in this assessment. 

Additionally, future studies may examine cultural variations in the perception and analysis of greenwashing by 

extending the analysis to non-English research. We limited the publications we selected for this research to those 

that included the search phrases in the abstract or title. We may have missed some fascinating instances or 

conversations by reducing the search in this manner, but the decision was justified by the need to find those articles 

with a clear emphasis on the subject. Similar terminology and ideas should thus be taken into account when 

choosing greenwashing-related material to expand the study of greenwashing research. 

  

 



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7.3. Implications 

Since the financial sector is responsible for providing the capital required to convert our economy into a more 

sustainable one, it is essential to the battle against climate change. Traditional providers and, most importantly, 

fintech businesses provide new financial services related to sustainability to enhance, expand, and automate financial 

services. Fintech uses techniques like crowdfunding, big data analytics, blockchain technology, and artificial 

intelligence to demonstrate continuity and consistency with ESG requirements. 

As previously said, there are numerous similarities between sustainable finance and fintech. Fintech may 

increase the sustainability of the financial industry as a whole by promoting green money. After analysing Fintech 

platforms and greenwashing tactics, it is determined that these platforms still require development to inform and 

educate users, investors, and consumers about the conduct of the companies they typically do business with as well 

as the bonds and stocks they purchase. In light of this, this paper offers some helpful guidance and suggests 

enhancements to maximise the platforms' functionality in terms of consumer protection and information. Using 

several real-world instances of sustainable fintech, the theoretical framework has been used to demonstrate how to 

encourage green investment and adopt sustainable practices. To counteract greenwashing, stakeholders—including 

corporations, non-governmental organisations, and governmental bodies—must collaborate to develop industry 

standards, exchange best practices, and hold enterprises responsible for their claims. Long-term, systemic changes 

are necessary for corporate commitment to sustainability, and sustainable practices must be prioritised in key 

business initiatives. This change improves competitiveness, strengthens organisational resilience, and helps the 

environment. In summary, resolving the conflict around corporate greenwashing requires a thorough strategy, 

including industry cooperation, consumer education, and regulatory intervention. Businesses need to understand 

that true sustainability is a basic duty in the quest of a positive interaction between industry, society, and the 

environment, not merely a desirable quality. Beyond the surface-level appeal of greenwashing, sustainable 

development can only be promoted by sincere dedication and coordinated efforts. One major problem that has an 

impact on social, economic, and environmental growth is corporate greenwashing. It entails businesses fabricating a 

false sense of environmental accountability, which raises social and environmental dangers. In order to tackle this 

problem, regulatory solutions, accountability systems, and consumer education are essential. Cooperation is crucial 

between companies, customers, and authorities.  

 

Funding: This study received no specific financial support.    
Institutional Review Board Statement: Not applicable. 
Transparency: The authors declare that the manuscript is honest, truthful and transparent, that no 
important aspects of the study have been omitted and that all deviations from the planned study have been 
made clear. This study followed all rules of writing ethics. 
Competing Interests: The authors declare that they have no competing interests. 
Authors’ Contributions: All authors contributed equally to the conception and design of the study. All 
authors have read and agreed to the published version of the manuscript. 

 

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