What did firms do during COVID-19? An examination of corporate sustainability performance in Fintech firms

Purpose This study aims to investigate the nexus between corporate sustainability performance, Fintech and COVID-19 by examining how COVID-19 has impacted Fintech firms’ environmental, social and governance (ESG) performance. The study further examines the long-term effects on ESG performance post-pandemic, to shed more light on the persistence of firms’ commitment towards sustainability in a post-pandemic world. Design/methodology/approach The sample includes all Fintech firms listed in the STOXX Global FinTech Index over the period 2014–2023. Fixed-effects regression analyses are conducted to examine this relationship, controlling for other firm characteristics. To further ensure results validity, the two-stage least squares estimation method is also used. Findings This paper find that Fintech firms exhibit better ESG/pillar performance during COVID-19, supporting the view that firms tend to maintain or enhance their sustainability practices. Interestingly, the findings also reveal that Fintech firms could maintain and even improve their ESG/pillar performance after the pandemic, indicating that these changes are lasting, not merely short-term adaptations during the hard times of the crisis. Practical implications For practitioners and firms, the results allow for a better understanding of Fintech firms’ tendency towards sustainability practices, especially in a post-pandemic world. For investors, the findings help get insights into the drivers of the sustainability behavior of Fintech firms in response to the pandemic. Originality/value To the best of the authors’ knowledge, this paper is one of the first attempts to investigate how COVID-19 affects Fintech firms’ engagement in sustainability/ESG activities to extend both the increasingly growing literature on sustainability and the literature that focuses on Fintech and its role in a today’s world.