Do Corporate Strategies in Fintech and Green Finance Enhance ESG Performance? The Moderating Role of Government Policies

ABSTRACT Despite the growing interest in ESG performance, limited research explores the mediating role of government policy in the relationship between Fintech, green finance and ESG outcomes. We address this gap by examining how Fintech and green finance influence ESG performance through government policies. We analysed panel data of banks in China and the United Kingdom from 2014 to 2024 using robust advanced regression estimates, such as Dynamic Common Correlated Effects, Common Correlated Effects Generalized Test and Bootstrap Quantile Regressions. Results show that both Fintech and green finance play a significant role in enhancing banks' ESG performance in the long run. Findings further reveal that Fintech significantly supports banks' green finance developments, with the effect being more significant at higher quantiles. Additionally, government policies positively moderate the Fintech and green finance impact on banks' ESG performance across all quantiles. Interestingly, our results also highlight country differences: The United Kingdom experiences a greater impact of Fintech on ESG performance, while green finance has a stronger impact on ESG performance in China. Additionally, the role of Fintech in supporting green finance has a higher influence on Chinese banks than in the United Kingdom. The study emphasizes the critical role of policy interventions and innovation‐driven frameworks in coordinating Fintech and green finance initiatives with long‐term ESG targets.