The Role of Information Technology (Fintech) in Tackling Climate Change and Sustainability

Politicians, policymakers, and environmentalists around the world have sounded the alarm on the back of the unprecedented surge in economic activities and the consequent impact it had on environment degradation. The recurrent extreme weather events have compounded the physical risks facing the economy, which tend to be acute and chronic. With the advent of technological innovations in the past several decades, the demand for energy increased. The excessive usage of electricity, particularly in the mining of cryptocurrencies, became a source of concern. This has prompted policymakers, researchers, and other stakeholders to re-evaluate the costs and benefits of technological innovations in general, as well as in Fintech, and how such technologies can contribute to the restoration of the environment and achieve sustainability. Since the technology has been perceived for long as dual edged sword for the environment, studying its role in restoring the environment or at least in mitigating environment degradation risk is a key imperative at the present time. Therefore, this paper attempts to address the question of whether technological innovations, such as artificial intelligence and blockchain, can help economies mitigate climate risk and achieve sustainability, by reducing carbon emissions, generating greener energy, and mitigating transition risk. The results of our literature review demonstrated, in overall terms, a positive sentiment and encouraging results about the myriad number of applications that technology in general and fintech in particular have in paving the way for a greener and more sustainable economy.