This study examines the impact of business freedom, renewable energy consumption, financial development, energy consumption, and urbanization on environmental degradation in both developed and developing countries from 2000 to 2022. Panel least squares and generalized method of moments were used for empirical analysis. The findings show that business freedom and renewable energy consumption have a significant and detrimental influence on environmental degradation in both developed and developing nations. Financial development has a significant negative impact on environmental degradation in developed countries but a positive impact in developing countries. Urbanization has a significant positive impact on environmental degradation in both developed and developing nations. Energy consumption has a positive and significant relationship with environmental degradation across the board. The study suggests that promoting business freedom and renewable energy sources can help mitigate environmental damage. Addressing the negative consequences of urbanization on the environment is also critical. The findings highlight the need for policies that balance economic growth with environmental preservation. The study contributes to the understanding of the complex relationship between socio-economic factors and environmental outcomes, offering actionable policy recommendations for sustainable development and environmental protection.This study examines the impact of business freedom, renewable energy consumption, financial development, energy consumption, and urbanization on environmental degradation in both developed and developing countries from 2000 to 2022. Panel least squares and generalized method of moments were used for empirical analysis. The findings show that business freedom and renewable energy consumption have a significant and detrimental influence on environmental degradation in both developed and developing nations. Financial development has a significant negative impact on environmental degradation in developed countries but a positive impact in developing countries. Urbanization has a significant positive impact on environmental degradation in both developed and developing nations. Energy consumption has a positive and significant relationship with environmental degradation across the board. The study suggests that promoting business freedom and renewable energy sources can help mitigate environmental damage. Addressing the negative consequences of urbanization on the environment is also critical. The findings highlight the need for policies that balance economic growth with environmental preservation. The study contributes to the understanding of the complex relationship between socio-economic factors and environmental outcomes, offering actionable policy recommendations for sustainable development and environmental protection.