The BRICS region has considered achieving environmental sustainability a top priority in terms of policy. Environmental distress is mostly brought on by the region’s continued reliance on fossil fuels to supply local energy needs. Besides, the region has historically been a significant importer of fossil fuels, making it difficult to substantially reduce the region’s reliance on them. As a result, the BRICS nations’ greenhouse gas (GHG) emission rates have steadily increased over time. Moreover, the region offers vast untapped amounts of renewable energy sources that may be used to generate power without adversely harming the environment. In light of this, this paper examines the combined effects of green finance (GFN) and financial technology (fintech) in achieving the region’s carbon neutrality goals from 1990 to 2020, while controlling for energy innovation, economic growth and natural resources rent. The results for the BRICS economies, which are supported by the EKC hypothesis, suggest that GFN, fintech and energy innovation (ENI) promote environmental sustainability. However, natural resources rent (NRR) and economic growth (GDP) degrade environmental quality. Additionally, it has been shown that the bidirectional causality exists between CO2 emissions and GFN, fintech, and NRR. However, GDP and ENI have been shown to exhibit unidirectional causality with CO2 emissions. Based on the empirical findings, it is suggested that the BRICS countries should speed up the development of green financial products and expand the ability of banks and financial institutions to provide green credit facilities, and put into the research on the usage of GFN solutions.

In terms of policy, the BRICS region has prioritized achieving environmental sustainability. Environmental problems are mostly caused by the area's continuous reliance on fossil fuels to meet its energy requirements. It is also challenging to significantly reduce the region's reliance on fossil fuels because historically, the region has been a big importer of fossil fuels. As a result, the greenhouse gas (GHG) emission rates of the BRICS countries have been rising over time. Furthermore, the area has enormous untapped reserves of renewable energy sources that can be exploited to produce electricity without negatively impacting the ecosystem. In light of this, this research analyses, while controlling for energy innovation, economic growth, and natural resource rent, the combined effects of green finance (GFN) and financial technology (fintech) in reaching the region's carbon neutrality goals from 1990 to 2020. The findings for the BRICS economies, which are consistent with the EKC theory, imply that environmental sustainability is promoted by GFN, fintech, and energy innovation (ENI). NRR (natural resource rent) and GDP (economic growth) compromise environmental quality, nevertheless. It has also been demonstrated that there is a two‐way causal relationship between CO₂ emissions and GFN, fintech, and NRR. However, it has been demonstrated that GDP and ENI have a one‐way causal relationship with CO₂ emissions. It is recommended that the BRICS nations speed up the development of green financial products and increase the capacity of banks and financial institutions to offer green credit facilities based on the empirical findings. The basic study of how green finance solutions might be used while lowering the related risks should receive more funding.

The extant literature has produced mixed evidence on the relationship between financial development and ecological sustainability. This work addresses this conundrum by investigating financial development’s direct and indirect consequences on ecological quality utilizing the environmental Kuznets curve (EKC) methodological approach. Our empirical analysis is based on the novel dynamic autoregressive distributed lag simulations approach for South Africa between 1960 and 2020. The results, which used five distinct financial development measures, demonstrate that financial development boosts ecological integrity and environmental sustainability over the long and short terms. In the instance of South Africa, we additionally confirm the validity of the EKC theory. More importantly, the outcomes of the indirect channels demonstrate that financial development increases energy usage’s role in causing pollution while attenuating the detrimental impacts of economic growth, trade openness, and foreign direct investment on ecological quality. Moreover, the presence of an inadequate financial system is a requirement for the basis of the pollution haven hypothesis (PHH), which we examine using trade openness and foreign direct investment variables. PHH for both of these variables disappears when financial development crosses specified thresholds. Finally, industrial value addition destroys ecological quality while technological innovation enhances it. This research provides some crucial policy recommendations and fresh perspectives for South Africa as it develops national initiatives to support ecological sustainability and reach its net zero emissions goal.

Fiscal decentralization and green innovation are important to a country’s economic progress, but the externalities of increased pollution as a result of a rise in the energy used and economic growth must not be overlooked. The destruction of the environment presents a serious threat to human existence. South Africa, like several nations, has been working on reducing its dependence on fossil fuels such as coal by utilizing modern energy-efficient technologies that allow to establish a more carbon-neutral economy. Several attempts have been made to identify the major sources of environmental deterioration. Within the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) framework from 1960 to 2020, this study aims to check empirically the effect of fiscal decentralization (FD), green technological innovation (GI), trade openness (OPEN), population size (POP), per capita GDP (GDP), per capita GDP squared (GDP²), institutional quality (INS), and energy consumption (EC) on carbon emissions (CO₂) in South Africa, as given its fast economic progress the country is facing problems with CO₂ emission. The recently developed novel dynamic autoregressive distributed lag (ARDL)-simulations framework has been used. The outcomes of the analysis indicate that (i) FD, GI, and INS improve environmental sustainability in both the short and long run; (ii) OPEN deteriorates environmental quality in the long run, although it is environmentally friendly in the short run; (iii) per capita GDP increases CO₂ emissions, whereas its square contributes to lower it, thus validating the presence of an environmental Kuznets curve (EKC) hypothesis; (iii) POP and EC contribute to environmental deterioration in both the short and long run; and (iv) FD, GI, OPEN, POP, GDP, GDP², INS, and EC Granger cause CO₂ in the medium, long, and short run, suggesting that these variables are important to influence environmental sustainability. In light of our empirical evidence, this paper suggests that the international teamwork necessary to lessen carbon emissions is immensely critical to solve the growing trans-boundary environmental decay and other associated spillover consequences. Moreover, it is important to explain responsibilities at different tiers of government to effectively meet the objectives of low CO₂ emissions and energy-saving fiscal expenditure functions.