Corporate sustainability in green FinTech: Impacts on performance and corporate governance

Abstract

Purpose: This study aims to evaluate the impact of FinTech companies’ corporate sustainability reports on corporate performance in the United Kingdom (UK). Additionally, the study examines the effect of corporate governance on this association. Moreover, it investigates whether there is a relationship between a FinTech company’s performance and the number of green certificates it holds, as well as its position in the ‘Green Ranking’.

Design/methodology/approach: The study uses a sample of the UK FinTech firms from 2010 to 2022. The dynamic System Generalised Method of Moments technique is employed in the methodological approach to examine the main hypotheses.

Findings/results: Our findings indicate a positive relationship between the disclosure of corporate sustainability reporting and the corporate performance of FinTech companies. This relationship is further strengthened by corporate governance, which enhances firm performance. Contrary to expectations, the number of green certificates and the ‘Green Ranking’ exhibit an inverse relationship with the firm’s performance.

Practical implications: The study offers valuable insights into the FinTech industry, aiding policymakers and investors in enhancing transparency among FinTech firms. This enhancement is crucial for the growth of the real economy and financial markets, particularly in understanding the relationship between FinTech characteristics and firm performance.

Originality/value: This study addresses gaps in the existing literature by examining the impact of corporate sustainability on the UK FinTech companies. It also considers the influence of corporate governance, aiming to enhance our understanding of the FinTech sector and provide valuable insights for decision-makers and investors.