This study examines the impact of business freedom on environmental degradation in both developed and developing countries from 2000 to 2022. Using panel least squares and generalized method of moments, the research finds that business freedom and renewable energy consumption significantly contribute to environmental degradation. Financial development also plays a significant role, with a negative impact on environmental degradation in developed nations, while energy consumption has a positive and significant relationship with environmental degradation across all analyses. Urbanization is found to have a positive and significant impact on environmental degradation in both developed and developing nations. The findings suggest that encouraging entrepreneurial independence and using renewable energy sources can help mitigate environmental damage, and addressing the negative consequences of urbanization is critical. The study provides valuable insights for developing tailored strategies to balance economic expansion and environmental preservation.This study examines the impact of business freedom on environmental degradation in both developed and developing countries from 2000 to 2022. Using panel least squares and generalized method of moments, the research finds that business freedom and renewable energy consumption significantly contribute to environmental degradation. Financial development also plays a significant role, with a negative impact on environmental degradation in developed nations, while energy consumption has a positive and significant relationship with environmental degradation across all analyses. Urbanization is found to have a positive and significant impact on environmental degradation in both developed and developing nations. The findings suggest that encouraging entrepreneurial independence and using renewable energy sources can help mitigate environmental damage, and addressing the negative consequences of urbanization is critical. The study provides valuable insights for developing tailored strategies to balance economic expansion and environmental preservation.