This study delves into the intricate relationship between economic growth and its ecological repercussions, employing a comprehensive assessment of ecological footprint across 131 nations. The time period considered for the research spans from 2009 to 2019. Utilizing the CS-ARDL methodology, the results indicate a correlation between reducing ecological footprint and bolstering private sector domestic credit. Additionally, a relationship between diminishing private sector domestic credit of banks and augmenting private sector domestic credit within the financial sector has been identified. In conjunction with other indicators of financial advancement, the significance of domestic lending to the private sector has been underscored. The study reveals a notable reduction in human population's adverse impact on the environment. However, increased levels of energy consumption, foreign direct investment and per capita GDP are associated with an improvement in global quality of life. Particularly noteworthy is the validation of the "pollution haven hypothesis" in the global economic context. The implications of this research are substantial; suggesting that global economic dynamics may support efforts towards environmental conservation. However, outcomes may vary across regions or countries, particularly regarding the emphasis placed by the financial sector on environmental preservation. This study comprehensively examines the complex nexus between economic progress and its ecological consequences, keeping in consideration factors such as financial growth, urbanization, energy consumption and Foreign Direct Investment (FDI).

China’s “carbon peak and neutrality” policy has thrust the convergence of corporate ecological conservation and economic progress to the forefront of sustainable development. This study, aiming to tackle the “sustainability challenge”, delves into the driving forces and operative mechanisms that intertwine corporate environmental performance with financial outcomes from 2015 to 2020. Focusing on A-share listed companies in heavily polluting sectors across Shanghai and Shenzhen stock exchanges, it categorizes formal institutional pressure into two types: command-oriented and market-driven, revealing a significantly stronger positive effect of market-based pressure compared to command-based pressure. Additionally, this research examines the distinct impacts of these institutional pressures under different conditions such as ownership structure, regional location, and executive education levels. The findings indicate that state-owned enterprises, eastern region firms, and those led by highly educated executives are more responsive to command-based pressure. Conversely, privately-owned businesses, entities in central–western regions, and those with lower executive education primarily respond to market-based pressure. Moreover, this study underscores the interplay between informal and formal institutions, observing that the influence of market-based pressure on corporate environmental–financial integration is notably amplified when public awareness of environmental protection increases, thereby highlighting social factors’ pivotal role in business decision-making. In essence, this paper accentuates the significance of aligning corporate environmental and financial goals for sustainable development, offering fresh insights to academia and fostering sustainable practices and research within the corporate realm.