This study unpacks how supply chain management, knowledge management, and green innovations act as critical levers in driving energy transition while safeguarding environmental sustainability in an era of escalating climate challenges. Focusing on the G7 nations and using data from 2000 to 2022, this study addresses two central research questions: (i) What are the key determinants of energy transition (ET)? And (ii) what are the key determinants of environmental degradation (ED)? To answer these questions, the study applied Lewbel IV-2SLS and FGLS estimators, revealing that in G7 economies, supply chain performance reduces environmental degradation but slows energy transition. Digital transformation also hinders transition in the short run, though at higher maturity it helps curb degradation. Trade openness supports transition but increases degradation, while urbanization promotes transition. Knowledge management and green innovation follow an inverted-U pattern, and control of corruption shows mixed effects. Energy transition itself strongly reduces environmental degradation, whereas economic growth generally increases it. Based on these results, the study formulates a set of policy recommendations to align economic growth with long-term sustainability goals.