THE INTEGRATION OF CLIMATE RISK MODELING INTO FINTECH-DRIVEN GREEN FINANCE INSTRUMENTS

Beginning to transform the way the efficiency of portfolios is defined and attained, climate resilience and digital innovation is the new frontier in global finance. This paper conducts a study on the extent to which FinTech-innovated green finance instruments offer sustainable investments performance in adaptive diversification across a 42 country dataset. For the study, advanced structural equation modeling and multilevel regression were employed to IMF, BIS, FSB, OECD, and World Bank secondary datasets. The statistical results show that of the factors influencing sustainable portfolio efficiency, FinTech innovation (β=0.41) takes precedence, followed by the expansion of green finance (β=0.29) and climate disclosure (β=0.22). The climate-risk model reinforces the effects of climate modeling on these variables. Findings show that digital technologies mitigate asymmetry and stabilize variance of a portfolio. It extends Modern Portfolio Theory wherein climate finance is the new frontier and environmental risk and climate risk are brought to a more sophisticated level. This study has suggested an integrated climate-FinTech analysis, expanding the explanatory perspective, and underscoring a new paradigm for the study of sustainable portfolio in adaptive global formulations. Algorithmic climate risk modeling is an intersection of profitability and planetary stability. It recommends that integration resilient capital allocation.