Evaluating the effectiveness of green finance mechanisms, digitalization, globalization, and renewable energy consumption in advancing environmental sustainability in G20 countries

Abstract

Climate change, caused by the burning of fossil fuels, has emerged as an acute world problem, especially in the Group of Twenty (G20), where CO2 emissions and other greenhouse gases are accumulating. This research examines how energy consumption, digitization, internationalization, and green finance affect the environmental sustainability of G20 countries in 2004–23. It also discusses how green technology innovation mediates these relationships. The research-based analysis of World Development Indicators and Organization for Economic Cooperation and Development data employed static panel data, fixed-effects models, and STATA software for econometrics. The findings also reveal that the four variables, namely green finance, digitalization, globalization, and energy consumption, significantly and positively correlated with environmental sustainability. It was also revealed that green technology innovation has a significant, although negative, impact on mediating these factors. Logically, these outcomes point to the fact that, as much as green technology innovation is crucial, the integration into the sustainability framework has to improve its synchronization with other variables. The study provides new insights into enhancing green market systems in G20 countries to facilitate low-carbon technology exchange for emissions reduction. The findings of this research could be helpful for policymakers to improve green financing strategies, promote digitalization for environmental upgrading, and support effective energy use.