ABSTRACT This paper examines the effect of financial technology (FinTech), renewable energy consumption as well as human capital on environmental sustainability within the ASEAN economies between 2010 and 2022. As opposed to past studies that evaluate these variables independently, the study presents a new PCA‐driven composite FinTech index that represents various trends of digital financial development in the region, with the use of the most consistently accessible indicators. To overcome the endogeneity, unobserved heterogeneity, and dynamic persistence issues in CO 2 emissions, a two‐step System GMM estimator is used, and not manageable by the conventional estimators. These findings reveal that the development of FinTech, the use of renewable energy, and human capital would bring down CO 2 emissions, but economic growth would escalate pressure on the environment. Despite the inability to integrate some FinTech indicators and more ecological items due to the lack of data, the results represent strong evidence that digital finance, transition to clean energy, as well as human capital formation collectively promote environmental sustainability. Combining these factors into a single empirical model, this research makes original methodologies and theoretical contributions to the existing literature on FinTech‐sustainability, especially in rapidly digitalizing emerging economies.
Xie et al. (Mon,) studied this question.