In recent years, rising temperatures across the globe, caused by an increase in carbon dioxide emissions from greenhouses, particularly CO2 (CO2) due to economic activities, have now a major concern for the world (Ahmed and colleagues. 2019). This is of vital importance. Indeed growing economic prosperity with a healthy, sustainable environmental footprint is one of the major challenges facing us in this century (Ahmed and co. 2021a). This has drawn attention from eco-economic experts around the world as they seek to identify ways to sustain economic growth. As a result, a number of studies have investigated the relation between economic growth and sustainability in recent decades.

In this sense, many ecological quality indicators (EQIs) are being proposed and utilized in economics modeling (Fakher and co. 2023 20, 2022) for example, such as Ecological footprint indicator (EFI) (Sultana and co. 2022), environmental performance index (EPI) (Musa et al. 2021) Adjusted net savings (ANS) (Salahuddin and Gow, 2019) Environmental sustainable index (ESI) (also known as the ecological vulnerability index (EVI) (Fakher and co. 2021b) and the pressure on the natural (PN) Index (Asici 2013). These studies have shown that different levels of development in different countries and regions may have distinct, different influences on environmental quality (EQ). There are inconsistencies in the data in the literature, suggesting that the selection of the dependent variable used to measure EQ may have an effect on the results of regressors. Therefore, choosing the right measurement method to measure EQ is a major problem.

Alongside economic growth, Other important elements have an impact on the environment. In particular, FD and technological innovation are the most important. Innovation in technology (TI) is the subject of a variety of studies, but there are debates about the environmental impact of TI. TI is a major factor in economic development and productivity, as well as advancements in technology. Technologies that are improved could play a significant part in decreasing the environmental impact (ED) (Ullah and co. 2021). Technology-driven innovation can aid to create a low-carbon economy by facilitating access to and use of green energy by utilizing techniques in the area that use renewable energies (Ahmad and co. 2020). Green technology for energy, such as solar panels, help to reduce carbon emissions (Kou and colleagues. 2022). This improves the ecological quality by increasing the production of renewable energy and consuming.

FD may have both beneficial and negative effects to the natural environment (Kihombo and colleagues. 2021). Despite the multitude of studies that have been conducted regarding this subject, however, there’s no consensus on the environmental impacts of FD. On the one aspect, FD helps businesses to expand, which may increase the amount of energy consumed (EC) as well as waste and land use. FD can also help meet the financial requirements of more individuals, which increases the purchasing power of all individuals, which in turn increases the use of resources and worsens ED (Kihombo and Co. 2021). However, FD can increase funding for green projects that improve the quality of life (Acheampong 2019, 2019).

Alongside the direct relationship between EQ and FD, It is also known that FD can influence the TI. Therefore, FD can indirectly impact the surrounding environment via its TI channel (Fakher and colleagues. 2021a). For example, FD provides a way for societies to benefit from modern technology and environmentally-friendly clean manufacturing that improves regional and global environmental sustainability (Acheampong 2019). Additionally, FD can lead to technological innovation that could reduce consumption of resources. This is a way to decrease ED (Ahmed and co. 2021b). In addition, the advancement of technological advancements in the financial industry helps to boost economic growth by reducing expenses and improving efficiency and performance of financial institutions (Kou and colleagues. 2021). The positive effect of financial technology on economic growth will, in turn, indirectly improve the environment by encouraging the development of better environmental laws and technology (Ahmed and Co. 2021b). These arguments emphasize the necessity of understanding the relationship of FD as well as TI as a factor determining EQ that has mostly neglected in the research literature. Therefore, this study examines the effect of moderating FD in influencing the ecological impact that result from TI on TI in Organization for Economic Cooperation and Development (OECD) countries.

We picked a sample of OECD economies to conduct this study based on the reasons listed below. first, as per the World Bank (2019), OECD countries contribute around 63 percent of the global GDP, which suggests that they consume a significant portion of the world’s scarce resources. Additionally, the growth in the demand for energy (total global consumption of energy), which calls for the utilization of fossil fuels, is primarily derived from OECD countries. Approximately 73 percent of EC in these countries comes made up of non-renewable resources (27 percent gas and 22% coal and 24 percent oil). Thirdly, in the last 30 years, CO2 emissions have risen by approximately 61% throughout the world in the last 30 years, with OECD countries accounting for one-third of the carbon dioxide emissions in the world (IEA 2019.). These emissions are thought to be one of the major causes for climate change that threatens the whole world. The figure 1 illustrates the primary EC along with the production levels in those countries.

Fig. 1

Production and consumption of energy sources in Organization for Economic Cooperation and Development (OECD) countries.

In the final analysis, as seen in Figs. 2, 3 and 3 3 and 4, the growth in economic activity that was observed during the time span that was studied in the research was followed by a rise of ED (based upon four ED indicators that were used in the study) and a decrease in the environmental quality (based in 2 EQ measures) for the chosen OECD economies. In light of this research, it’s crucial to know the relationships between EQ and other variables such as economic growth and FD as well as TI to develop effective environmental strategies.

Fig. 2

The trends of EFI, ANS, PN along with EVI (environmental degradation indicator) in relation to gross domestic product per habitant (GDP PC) for OECD countries.

Fig. 3

The trends in EPI as well as ESI (environmental indicator of quality) against gross domestic product per person (GDP PC) for OECD countries.

With this in mind, our study contributes to the research in many ways. To begin To the best of our knowledge, there has been no prior study that examined the impact on EQ of FD in conjunction with TI upon EQ. This is why the novelty in theory and practice of this research lies in the methodology used to analyze the indirect impact of FD on the environment via the channels of TI. We believe that our findings can assist policymakers in making critical environmental and economic decision-making decisions. We also focus on the OECD countries that have the most severe amounts of EC and pollution to the environment (Lasisi and Co. 2022) in order that the results could suggest ways to reduce the impact of global ED. The third reason is that this is the first study to test the validity of the effect of FD on EQ and TI within the EKC framework (which establishes a link between a variety of variables of ED and the per household income).