Climate-Aligned Fintech: Leveraging Digital Finance to Accelerate Low-carbon Transitions in Emerging Markets

The developing markets are confronted by a two-sided challenge: they must develop low-carbon transitions quickly, at the same time trying to overcome the deep roots of the financial intermediation barrier. Although the sphere of digital finance is growing very fast, the adoption of fintech innovations into climate action strategies is a rather insufficient matter. This paper forms an integrative perspective on climate-congruent fintech, exploring the role of digital financial solutions in decarbonizing an economy by using carbon-linked lending, green digital wallets, and ethical financial structures. Based on sociotechnical transition theory, behavioral finance, and institutional ethics, the paper develops a multilevel model of analysis according to which technological innovation is interconnected with the environmental performance and social inclusion.
Drawing on the example of a Wali, a premier illustration of an ethical fintech platform, the paper will reveal how value-based digital ecosystems can incorporate measures in sustainability, change behavioral patterns, and produce verifiable environmental impact. The paper also suggests a mixed-method architecture of evaluation, which includes impact measurement, monitoring-reporting-verification (MRV) and governance design. The results indicate an addition to the body of knowledge and practice since they uncovered the channels in which national climate commitments and inclusive green growth can be facilitated by fintech. The article pushes the original conceptual synthesis and policy relevance forward, making climate-aligned fintech an emerging field of international importance in the field of sustainable finance literature.