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Climate change and global warming create considerable problems for people, such as intense droughts. One of the biggest causes of global warming is the preference for fossil fuels in energy production. In this context, renewable energy has been considered an effective way to promote environmental quality. Several empirical studies have evaluated the impact of economic growth and energy on environmental quality. However, the possible influence of banking development on carbon emissions in South Africa has been ignored. Thus, this study contributes to the extant literature by assessing the impact of banking sector development on the environmental quality in South Africa over the period 1986–2017. For this purpose, the linkage between energy, economic growth, banking sector development and C 0 2 emissions are assessed by using the new technique of bootstrap autoregressive distributed lag. The findings from the ARDL estimations affirm that renewable energy consumption affects negatively C 0 2 emissions. However, the main conclusion of this study is that banking sector development has a negative influence on the environmental quality in South Africa through GDP and energy factors. The finding reveals that an increase in credit from banks to markets will lead to a rise in projects and investments, as well as strengthen risk management systems, potentially affecting economic growth and energy consumption and therefore increasing C 0 2 emissions. Hence, the outcome suggests that policymakers in South Africa must use the growth of the banking sector to enhance environmental quality by promoting investment in energy and production through renewable energy. • This paper examines the impact of banking sector development and renewable energy on environmental quality. • Renewable energy promotes environmental quality. • Banking sector development reduces environmental quality. • South Africa must increase the usage of renewable energy to have economic growth accompanied by a sustainable environment. • South Africa must use the growth of the banking sector to minimise environmental degradation. [ABSTRACT FROM AUTHOR]