Energy Reduction in the Sustainable Development Goals: Unraveling the Role of Digital Finance, Financial Literacy, Green Technology Adoption, and Digital Infrastructure

Objective: This study aims to identify financial factors influencing household energy efficiency, focusing on the role of digital finance and financial literacy, as well as examining the mediating role of green technology adoption and the moderating role of digital infrastructure. Theoretical Framework: This study integrates theories from sustainable development, financial economics, and behavioral science to analyze how digital finance and financial literacy enhance energy efficiency. Method: This research employs a Structural Equation Modelling approach using primary data from 2,400 households in Indonesia. Results and Discussion: The findings indicate that digital finance and financial literacy have a positive and significant effect on energy efficiency. Green technology adoption fully mediates the relationship between these two financial variables and energy efficiency. Digital infrastructure significantly moderates the relationship between financial literacy and green technology adoption, although the interaction between digital finance and digital infrastructure—when moderated by green technology adoption—reduces the positive impact on energy efficiency. Green technology adoption is also shown to have a strong direct effect on household energy efficiency. Research Implications: These results highlight the importance of policies that promote financial literacy, strengthen an inclusive digital finance ecosystem, and accelerate green technology adoption. These findings also have significant implications for the achievement of the Sustainable Development Goals (SDGs), particularly in Responsible Consumption and Production (SDG 12) through financial literacy, Reduced Inequalities (SDG 10) via inclusive digital finance, and Climate Action (SDG 13) through the adoption of green technologies. By aligning policy efforts with these goals, stakeholders can contribute more effectively to sustainable and equitable development. Originality/Value: This study examines digital finance and financial literacy as interconnected drivers of energy efficiency; introduces green technology adoption as a mediating factor linking these financial variables to energy efficiency; and incorporates digital infrastructure as a moderating variable that can strengthen or weaken these relationships.