The Nexus Between FinTech Adoption, Corporate Governance, and Carbon Emission Reduction: A PLS-SEM Analysis

Abstract

This paper investigates the interrelation among the three constructs of this study; corporate governance, fintech adoption, and carbon emission reduction in the banking sector of Saudi Arabia, with fintech serving as both a direct and mediating variable. The data was collected from 403 officials in the banking industry using a convenience random sampling technique. PLS-SEM was applied to test the hypotheses. The findings reveal that both corporate governance and fintech adoption exert significant and positive influence on carbon emission reduction (β = 0.606; β = 0.167, p < 0.05). The results further show that corporate governance significantly influences fintech adoption (β = 0.555, p < 0.05). The study also highlights the role of fintech in mediating the relationship between corporate governance and carbon emission reduction (β = 0.093, p < 0.05). The study emphasizes the need to implement effective governance frameworks and promote digital innovation to achieve sustainable environmental objectives.

Keywords: Financial technology, carbon emission reduction, corporate governance, sustainable development, Saudi Arabia, partial least square method.

DOI: 10.7176/RJFA/17-3-07

Publication date: September 30^th 2026