Harnessing digital finance for sustainability: An integrative review and research agenda
The report reviews the role of digital finance in advancing sustainability goals through bibliometric and thematic analysis of 168 studies. It identifies key themes like financial inclusion, green finance, and fintech, proposing a conceptual framework to align digital innovation with sustainable development, fostering eco-friendly investments, and promoting global financial inclusion.
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OVERVIEW
Introduction
The study examines the role of digital finance in advancing sustainability by integrating digital innovations such as blockchain, artificial intelligence (AI), and big data into financial systems. With a growing emphasis on Sustainable Development Goals (SDGs), the research analyses 168 publications through bibliometric and thematic analysis, identifying trends, themes, and opportunities. The field has experienced a 15.86% annual growth in publications, with a significant surge post-2020, driven by the pandemic and global focus on sustainability. In 2022, there were 46 publications in the area, up from 28 in 2021, reflecting an increasing academic and practical interest in sustainable digital finance.
Research methodology
A rigorous two-tiered analytic approach was adopted, combining bibliometric analysis and a literature review. The study screened 1,079 articles from the Web of Science database, selecting 168 for their relevance to sustainable digital finance. Quantitative tools, such as keyword co-occurrence networks and an Author-Country-Keyword (A-C-K) framework, were used to uncover patterns in publication, citation, and thematic focus. Analysis highlighted the dominance of research originating in the Asia-Pacific region, with countries like China leading in fintech and green bonds and India making significant strides in digital financial inclusion. The use of thematic mapping provided insights into the evolution of major themes, aligning them with global sustainability priorities.
Thematic evolution
The report identifies seven themes: financial involvement and participation, sustainable financial development, green finance, digital venture capital, fintech, financial performance, and digital strategy. These themes are categorised into four broader dimensions:
- Digital financial inclusion: Explores the reduction of barriers to financial access, including SME financing and addressing income inequality, with specific attention to gender and urban-rural gaps. Mobile technology and digital wallets are identified as critical tools for expanding access, particularly in developing economies.
- Digital sustainable revolution: Focuses on green finance initiatives like carbon credit trading, green bonds, and ESG integration. For example, the Asia-Pacific accounts for over 42% of global green bond issuance, highlighting regional leadership in low-carbon finance.
- Digital financial transformation: Examines the impact of disruptive technologies, such as blockchain for carbon markets and AI for predictive ESG analytics. These innovations enhance transparency and efficiency in sustainable investment markets.
- Technology for social good: Investigates the role of digital strategies in promoting eco-innovation, corporate social responsibility (CSR), and global SDGs. Internet of Things (IoT) and real-time sustainability reporting are highlighted as emerging tools.
These themes collectively showcase the transformative role of digital finance in achieving SDGs, fostering economic inclusion, and addressing environmental challenges.
Discussion for future research agenda
The study presents specific research directions to address existing gaps:
- Digital financial inclusion: Investigate how digital platforms can improve access for underserved populations while addressing gender disparities and financial literacy gaps. For example, exploring how mobile banking impacts rural communities in developing regions.
- Green finance: Study the effectiveness of green finance instruments like green bonds and public-private partnerships in mitigating climate risks and promoting ESG compliance.
- Fintech and digital strategy: Examine the role of blockchain in improving transparency in carbon markets and the integration of AI for risk assessments in ESG investments. Additionally, research the impact of digital disruption on corporate strategies and CSR initiatives.
- Ethical and legal challenges: Address concerns over data privacy, cybersecurity, and the regulatory complexities of cross-border financial systems.
Specific questions raised include how digital finance can reduce fraud and enhance transparency, the scalability of green finance in small economies, and the application of AI in improving ESG reporting.
Conclusion and policy implications
Sustainable digital finance offers transformative opportunities to achieve SDGs by leveraging technological advancements for economic inclusion and environmental sustainability. The study urges policymakers to harmonise cross-border regulations, promote financial literacy, and foster innovation through public-private collaborations. For example, decentralised finance (DeFi) and tokenisation are identified as promising tools for democratising green investments.
Policymakers are also encouraged to support the adoption of blockchain for carbon trading and AI for sustainability analytics. Collaboration between governments, financial institutions, and the private sector is deemed essential to foster inclusive growth, mitigate climate risks, and address systemic inequalities. Sustainable digital finance, with its integration of innovative technologies, represents a pivotal pathway to align economic progress with long-term environmental and social goals.
