AI-DRIVEN GREEN FINTECH AND SUSTAINABLE DEVELOPMENT: EMPIRICAL EVIDENCE FROM INDIA’S FINANCIAL SECTOR
Keywords:
Green Fintech, TOE Framework, Sustainable Finance Framework, Artificial Intelligence, ESG Performance, Climate Finance, Financial Innovation, India.,,Abstract
As the global economy shifts from a paradigm of sheer volume to one cantered on ecological
quality, the financial sector has emerged as a primary orchestrator of the transition toward low
carbon and resilient economic models. In India a nation currently steering toward a net-zero
target for 2070 "Green Fintech" represents a strategic imperative rather than a elective
innovation. This study employs a dual theoretical approach, merging the Technology
Organization-Environment (TOE) model with the Sustainable Finance Framework (SFF), to
evaluate the catalysts and consequences of Artificial Intelligence (AI) implementation within
the Indian banking landscape. Drawing on a quantitative dataset of 300 practitioners and
longitudinal ESG metrics from 2021 to 2025, the research identifies organizational maturity
defined by digital infrastructure ($\beta = 0.419$) and capital readiness ($\beta = 0.401$) as
the primary determinant of adoption, significantly outweighing purely regulatory drivers. Our
findings indicate that AI-driven green finance instruments substantially elevate Environmental,
Social, and Governance (ESG) performance, with sector leaders such as ICICI and HDFC
reaching sustainability ratings of 78 and 73, respectively, by late 2025. Furthermore, the study
identifies a "Green AI" paradox, establishing that energy-optimized technological deployment
is vital to ensure that digital transformation does not inadvertently increase the sector's carbon
footprint. These insights offer a strategic roadmap for regulators like the RBI and SEBI to
harmonize climate-related disclosures with technological incentives to bridge the
"sustainability implementation gap."
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