Smart, sustainable, and inclusive? Investigating the dual impacts of digital and financial innovation on policy equity and environmental governance

Abstract

This study investigates how digital transformation, sustainable finance, and behavioral sentiment influence equity, resilience, and trust in climate governance in the Philippines. A quantitative-descriptive design was employed using data from 431 purposively selected respondents across government, private, NGO, and community sectors. Partial Least Squares–Structural Equation Modeling (PLS-SEM) tested relationships among nine sustainability constructs. Results indicate that digital transformation shapes inequality and policy innovation, sustainable finance enhances ecological resilience and carbon offset credibility, and positive behavioral sentiment reduces vulnerability to misinformation while increasing participation in green finance. The study underscores the integrated roles of technology, finance, and sentiment in advancing sustainable development and strengthening policy legitimacy. Investing in inclusive digital infrastructure, scaling sustainable finance instruments, promoting behavioral campaigns, and embedding transparency protocols can foster resilience, inclusivity, and trust in climate action.