Banking for Climate Risk Mitigation: An Investigation of the Role of Green Digital Finance

Abstract

The businesses facing contains accessing finance when adopting sustainable practices in business operations. Digital finance is a tool to reduce financial constraints imposed by traditional financial systems. This study investigates the role of green digital finance in reducing climate risk using balanced panel data from South Asian economies. The study utilized a pooled mean group estimation approach to measure the impact of digital finance on climate risk in the presence of green innovation. The findings revealed that green digital finance mitigates climate risk and green innovation plays a significant role in enhancing the relationship. This study provides robust recommendations and policy implications