Mohammad Rezaei

Introduction: Climate change and the environmental sustainability movement have forced many policymakers and businesses to reconsider their behavior. The financial and banking sector is no exception to this rule and is undergoing a transition towards digital transformation. Financial institutions worldwide are increasingly turning to digital banking services for their operations, which offer higher operational efficiency and lower but significant environmental impact. Iran is assessed as one of the most vulnerable countries to climate change, global warming, and environmental degradation. Therefore, understanding Iran’s sensitivity to climate change becomes more and more essential for policymakers who aim to find ways to mitigate climate change and promote environmental sustainability. Materials and Methods: Data analysis is based on the panel data econometric model with the generalized least squares method. For this purpose, the digital banking variable has been used as independent variables along with GDP, urbanization rate, energy consumption, and industrialization. Data on the number of digital banking transactions based on the total transactions of five digital payment tools including: mobile banking, internet banking, ATMs, store card readers and branch terminals were extracted from the website of the Central Bank of the Islamic Republic of Iran for each province on an annual basis. Also, data on the per capita carbon dioxide emissions were obtained from the consumption of gasoline, kerosene, petroleum gas, furnace oil, natural gas and liquefied petroleum gas published in the energy products statistics of the National Iranian Petroleum Products Distribution Company, the country's energy balance and hydrocarbon balance and then converted into CO2 emissions in metric tons using the conversion factors used in the country's energy balance. Results and Discussion: The results show that the digital banking variable has a negative and significant effect on carbon emi