Models for Supporting Digital Sustainability Key Performance Indicators (KPIs) in European FinTech and Payments
Evita Kalmane-Pivkina
ABSTRACT
European enterprises are under increasing pressure to align digital innovation with sustainability goals, yet the financial technology (FinTech) and payments sector has lagged in embedding environmental, social, and governance (ESG) criteria into its core metrics (redbridgedta.com). This conceptual paper introduces the notion of a technology-enabled ESG integration loop (the “ESG-Tech Loop”) as a framework for digital sustainability KPIs – key performance indicators that measure sustainability outcomes within digital payment systems and FinTech platforms. Grounded in sustainable innovation theory, digital finance research, and emerging ESG frameworks, the paper develops a model illustrating how ESG data and technology-driven processes can form a continuous improvement cycle supporting sustainability objectives. The model delineates three dimensions – environmental, social, and governance – each capturing how digital payment innovations can incorporate and advance specific sustainability metrics. For example, European case initiatives like carbon-tracking payment cards and inclusive digital banking services demonstrate the model’s real-world relevance (thalesgroup.comredbridgedta.com). The paper articulates key drivers (e.g. regulatory mandates, stakeholder demand) and challenges (e.g. data transparency, cultural change) influencing ESG-Tech integration, and it outlines expected outcomes such as enhanced ESG performance and innovation capabilities. By conceptualizing a cohesive approach to embed ESG logic into digital payment systems, this work contributes to both theory and practice: (1) integrating diverse literature on ESG reporting, FinTech innovation, and sustainability strategy to ground a new framework for digital sustainability in financial services; (2) proposing a conceptual model – the ESG-Tech Loop – including its dimensions, enablers, and outcomes; and (3) offering implications for European regulators and industry practitioners on designing FinTech innovations that support measurable sustainability KPIs. Ultimately, this paper sheds light on how Europe’s FinTech and payments industry can be configured to drive sustainable innovation by systematically linking technological advancement with ESG performance indicators.
