The dynamic role of digital financial inclusion, sustainable energy transition, and governance in achieving global ecological sustainability

Abstract

AbstractA global surge in socio‐economic activities is putting a massive burden on ecological balance, which has become one of the major challenges worldwide. Yet, it is complicated for national and international authorities to find eco‐friendly and interlinked socio‐economic developments due to a lack of empirical evidence. In this era of digitalization, digital financial inclusion has an ability to create a balance among economy, ecology, and society by conserving natural resources. Meanwhile, it minimizes ecological burden by promoting sustainable energy transition at all societal levels, which is the main agenda of the United Nations (UN) Climate Change 28th Conference of Parties (UN‐COP28). Focusing on these intentions, this research aims to explore the dynamic influence of digital financial inclusion (DFI), sustainable energy transition (SET), and governance (GOV) on global ecological footprints (EFT) by taking a sample of 121 nations within a timeframe of 2003–2022. This study utilizes a two‐step system generalized method of moments (GMM) and Driscoll–Kraay (D–K) regression as prime and robust empirical techniques, respectively. The outcomes reveal that DFI significantly reduces EFT worldwide and upper‐middle‐income samples; however, it significantly enhances EFT in high‐income nations. While DFI has a negative and insignificant connection with EFT in lower‐middle and low‐income countries. Moreover, SET significantly declines EFT in all categories, and mixed outcomes are found for the linkage between GOV and EFT. Some vital policy implications for ecological sustainability are also provided in this research work.