The Impact of Digital Financial Literacy on Responsible Behaviour and Sustainable Consumption: Evidence from Waste Recycling Rates

Digital financial literacy is a key driver of sustainable consumption and responsible consumer behavior. It helps reduce wasteful consumption and increases household readiness to sort and recycle waste. This study aims to analyze the relationship between digital financial literacy and responsible recycling behavior among EU residents. Uneven digital financial literacy policies across EU countries result in disproportionate opportunities to use financial instruments to promote sustainable consumption patterns. Using a weighting method, the financial literacy level was calculated as 51.06 (71% of the maximum value), and the recycling rate for 2020–2024 was 10–12%. The maximum financial literacy score was 72, and results across countries show that the population's financial literacy is 69–74% of its potential. The correlation coefficient between quantitative indicators of financial literacy and resource recycling for 2020–2024 is 0.52, with significant deviations across quartiles. The presence of a system for mitigating these risks not only strengthens trust in these financial institutions but also leads to more responsible consumption. The findings can be used to adjust waste management policies and strategically plan measures to increase consumer engagement in digitally enabled circular economy processes.