1 ESG AND FINTECH FUNDING IN THE EU ANASTASIA GIAKOUMELOU a* ANTONIO SALVI b * STELIOS BEKIROS c † GRAZIA ONORATOd a Ca' Foscari University of Venice, Venice, Italy (CORRESPONDING AUTHOR) b University of Turin, Turin, Italy c University of Turin, Turin, Italy d University of Bari Aldo Moro, Italy Abstract The acronym FinTech, delineating financial technological innovation, altered the modus operandi of traditional banks and intermediaries and gave rise to alternative providers in the FinTech realm. At the same time, the increasing regulatory and market attention to environmental, social and governance (ESG) risks, changed the rules of traditional finance. This work investigates the impact of ESG on FinTech pricing. We analyze European FinTech firms to evaluate whether superior sustainability profiles lead to higher valuations during funding rounds from 2014 to 2022. We find that ESG reporting is positively related to capital raised, with investors addressing physical and transition risks and demonstrating higher propensity for firms that appear to mitigate them. Lower trust in the relatively young FinTech niche is confirmed by the signalling role ESG disclosure demonstrates, while finer shades of ESG profiling, such as rankings and certifications that are also examined in this paper, remain of no impact. Keywords: FinTech; ESG; physical risks; transition risks; firm value All authors jointly declare that This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. a* Department of Management, Ca' Foscari University of Venice, Italy, Tel: ++390412348701, Edward Wright Building S29, Email: ana.giakoumelou@unive.it b Department of Management, University...
