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This study explores the influence of financial development (FD) on CO₂ emissions in five South Asian economies including energy consumption (ENC) and per capita income (PCI) as control variables. Using annual panel data for the period 1980–2018, this study applies the second-generation unit root and cointegration tests, panel pooled generalized least square (GLS) estimate, pooled mean group (PMG) estimation, and Dumitrescu-Hurlin panel causality test to accomplish the study. Westerlund cointegration test confirms a long-run relationship among the variables. The GLS estimation results reveal that FD, ENC, and PCI have significant impacts on environmental pollution. The relationship between FD and CO₂ emissions is linear, and thus, FD causes environmental pollution positively; an increasing level of FD does not reduce the latter. PCI and ENC affect environmental quality negatively. However …