Institutional support, fintech innovation, and investor confidence in driving energy efficiency within Islamic green finance

Purpose This study aims to examine how institutional support, as captured by regulatory compliance and access to financing, enhances energy efficiency outcomes in Islamic green finance. It examines the complementary roles of fintech innovation and investor confidence as the technological and behavioural mechanisms that translate institutional arrangements into measurable sustainability performance. Design/methodology/approach Using survey data from 302 Islamic fintech users, investors, and market stakeholders in Indonesia, the study tests a dual-pathway framework through partial least squares structural equation modelling. Institutional support is modelled as a second-order construct, and mediation effects are evaluated using a two-stage hierarchical component approach and predictive assessment via PLSpredict. Findings Institutional support does not directly improve energy efficiency. Instead, its influence is transmitted through two reinforcing channels: (1) fintech innovation, which enhances transparency, monitoring, and digital efficiency; and (2) investor confidence, which strengthens credibility and capital allocation toward efficiency-oriented projects. Fintech innovation also strengthens investor confidence, creating a complementary mechanism that amplifies efficiency outcomes. The model demonstrates strong explanatory power (R2 = 0.822) and robust out-of-sample predictive accuracy. Research limitations/implications The study is based on cross-sectional survey data from Indonesia, whose regulatory, technological, and market characteristics may differ from those of other Islamic finance ecosystems. Accordingly, the findings should be interpreted within this institutional context. Future research could assess the framework through longitudinal and cross-country designs, objective measures of energy efficiency, and multi-source datasets. Comparative studies involving Malaysia, Gulf Cooperation Council countries, and conventional green-finance ecosystems could further examine the external validity and contextual boundaries of the proposed institutional–technological–behavioural relationships. Practical implications The findings offer differentiated implications for key stakeholders. Policymakers should align sustainable-finance strategies with technological development and market participation, while regulators should support digital monitoring, transparent reporting, and credible verification. Islamic financial institutions can embed digital capabilities into green-finance products, and fintech companies can develop technologies that strengthen both operational efficiency and market confidence. Investors should evaluate sustainability opportunities using verifiable performance information rather than relying solely on green labels. Social implications The results of this study highlight the importance of integrating digital monitoring, reporting, and verification (MRV) technologies into Islamic green finance to enhance transparency and investor trust. Such alignment between governance frameworks, technological capabilities, and behavioural trust can accelerate energy savings, strengthen market credibility, and support maqasid-oriented sustainability aspirations. Originality/value This study provides one of the first empirical validations of how institutional, technological, and behavioural mechanisms jointly shape energy efficiency within Islamic green finance. By framing fintech innovation and investor confidence as dual mediators, it offers a novel explanation of how regulatory design and digital transformation interact to produce real-economy sustainability gains.