Discovering the sustainable development role of fintech credit and the pilot low carbon project on greenwashing in China

Abstract

Low-carbon development is important to reduce global warming, allow people to live in normal temperatures and climates, and limit the loss of labor productivity by avoiding air pollution. However, greenwashing prevents low-carbon development by making companies appear more eco-friendly than they are. Therefore, this study examines the influence of financial technology (FinTech) credit and the implementation of the Pilot Low Carbon Project on corporate greenwashing in China from 2015 to 2021. The study uses the method of moment quantile regression (MMQR) to determine that FinTech credit and lowcarbon projects prevent greenwashing behavior and promote environmentally sustainable corporate practices in China. Fintech plays a crucial role in monitoring the environmental impact of urban development, especially in the context of the Low Carbon City Initiative. The influence of Fintech Credit on greenwashing experiences a notable reduction in the higher quantiles, especially between the 75th and 95th culminating in a significant decrease to approximately −0.07. Companies outside the low carbon city areas consistently experience a negative impact of Fintech Credit on greenwashing. This investigation contributes significantly to the discourse on the interplay between greenwashing, FinTech and sustainable urban development. It also provides valuable insights for the development of strategies aimed at mitigating misleading environmental claims made by companies.