In an era where sustainable development remains a paramount global challenge, the intricate interplay between energy finance, digital inclusion, and governance dynamics demands renewed scholarly attention. A groundbreaking study focusing on BRICS countries—Brazil, Russia, India, China, and South Africa—sheds light on the multifaceted pathways through which these factors coalesce to influence sustainable development trajectories. By employing a dynamic qualitative comparative analysis (QCA) alongside robust econometric modeling, researchers have unraveled a rich tapestry of interactions revealing that sustainable progress is not monolithic but rather contingent upon complex configurations of energy investment, digital financial ecosystems, and governance structures.
At the heart of this investigation lies a compelling narrative that defies simplistic assumptions about energy finance. The study challenges the pervasive notion that fossil fuel finance is inherently detrimental to sustainability goals. Instead, it posits that under certain institutional conditions, fossil fuel investments can coexist with—and even catalyze—progress in sustainable development. This paradigm shift emerges from the first identified synergy, where high fossil fuel energy finance is complemented by amplified digital financial inclusion and effective governance accountability, offsetting the environmental drawbacks traditionally associated with fossil fuel dependence.
This first pathway underscores the crucial role of governance mechanisms in transforming potential environmental liabilities into developmental assets. Governance accountability, marked by transparency and public sector efficiency, interacts dynamically with digital financial infrastructure to foster economic inclusivity. Such institutional robustness ensures that fossil fuel revenues do not merely perpetuate extractive economic models but are instead channeled into projects that enhance social welfare and promote inclusive growth. These findings resonate profoundly with institutional theory, emphasizing the primacy of sound governance frameworks as engines for sustainable progress even in energy mixes dominated by conventional sources.
The second synergy identified pivots on the resilience of sustainable development in contexts where governance accountability may be weak or inconsistent. In these scenarios, the combined force of sizeable investments in both fossil fuels and renewable energy, underpinned by widespread digital financial inclusion, acts as a counterbalance. This finding aligns with transitional development theories that highlight the importance of technological and financial momentum compensating for institutional shortcomings. Digital inclusion emerges as a democratizing force, broadening access to financial tools critical for both green and non-green energy ventures, thereby sustaining economic activity and fostering inclusive development.
Here, the digital financial landscape acts as a pivotal enabler, lowering barriers to entrepreneurship and facilitating access to capital for diverse energy projects. This broad-based financial accessibility mitigates institutional weaknesses by empowering a broader swathe of the population to participate in development processes. Furthermore, it suggests a layered complexity in how energy infrastructures and financial ecosystems operate symbiotically, reinforcing the notion that neither energy investment nor governance alone can singularly drive sustainable outcomes without robust digital connectivity.
In stark contrast to the previous two synergies, the third pathway represents an aspirational and ideologically resonant configuration: low fossil fuel energy finance paired with high renewable energy investment, digital financial inclusion, and governance accountability. This synergy epitomizes the principles of ecological modernization theory, positing that a transformative shift towards clean energy, smart governance, and technological diffusion is the most stable and sustainable long-term development path. The synergy affirms that institutional accountability plays a foundational role in enabling green transitions, ensuring that investments in renewable energy are effective, equitably distributed, and supported by enabling digital environments.
This ideal configuration signifies a systemic recalibration away from energy paradigms that have historically prioritized fossil fuels. It emphasizes the necessity for integrated policy frameworks harmonizing financial incentives, governance reforms, and technological infrastructures. Such alignment catalyzes the transition towards decarbonized economies within BRICS nations, heralding a future state where ecological sustainability and inclusive growth are mutually reinforcing rather than adversarial objectives.
Complementing these nuanced insights from the qualitative comparative analysis, the study’s econometric evaluation via dynamic ordinary least squares (OLS) further substantiates the positive influence of all four variables—fossil fuel energy finance, renewable energy finance, digital financial inclusion, and governance accountability—on sustainable development. This quantitative affirmation validates the multifactorial nature of developmental progress while also highlighting the limitations of conventional linear models like OLS, which often neglect the interactive or compensatory relationships revealed by QCA.
Notably, the positive coefficient associated with fossil fuel finance ascertains that fossil energy investments, when efficiently managed, can contribute constructively to infrastructure development and transitional energy innovations. This challenges critiques that dismiss fossil fuel finance as harmful by default, instead suggesting that strategic deployment of such capital, in tandem with governance and digital inclusion, supports a phased transition towards sustainability.
Among the variables, digital financial inclusion stands out as a consistently positive driver across diverse analytical approaches. The findings articulate its role as a critical enabler, facilitating access to financial services, lowering transaction costs, empowering entrepreneurship, and stimulating innovation in green technologies. Digital finance thus emerges as a keystone in the architectural framework underpinning sustainable development, bridging gaps between markets, consumers, and institutions.
Policy implications derived from these complex insights urge a departure from monolithic, one-size-fits-all prescriptions. Recognizing the heterogeneity of economic and governance contexts across BRICS countries, strategies must be tailored to current institutional realities. For nations navigating transitional phases with weaker governance, incremental gains in sustainability can still be achieved by leveraging fossil fuel finance and enhancing digital financial ecosystems. This orientation pragmatically embraces the imperfections of developmental stages while maintaining momentum toward more sustainable configurations.
Simultaneously, the overarching long-term objective should be to foster conditions envisaged by the third synergy, which emphasizes renewable energy investments reinforced by accountable governance and robust digital inclusion. This aspiration demands integrated policy designs that do not solely prioritize clean energy deployment but also deepen institutional reforms and digital infrastructure expansion. Such comprehensive approaches are essential for realizing the full potential of sustainable development agendas within emerging economies.
The study’s multifaceted methodology itself symbolizes a methodological advancement in sustainability research. By integrating dynamic QCA—a method adept at capturing configurational causality and complex interactions—with traditional econometric analysis, the researchers provide a richer, more precise understanding of causality in sustainability dynamics. This methodological sophistication prompts a re-evaluation of dominant research paradigms, encouraging scholars to embrace complexity rather than reductive simplifications.
Moreover, the emphasis on BRICS countries situates the findings within critical contexts of global economic transformation. These emerging economies, with their vast population bases, rapid urbanization, and diverse political systems, occupy pivotal roles in global sustainability transitions. Understanding their unique pathways offers valuable lessons transferable to other developing and transitional economies grappling with similar dilemmas.
In conclusion, this pioneering research reframes sustainable development not as a linear process driven solely by green investments or governance reforms but as an emergent property of interconnected financial, technological, and institutional arrangements. It challenges scholars and policymakers alike to envision sustainability as a dynamic mosaic, capable of manifesting through multiple pathways contingent upon contextual interactions. The implications extend beyond academic debates, offering actionable insights for designing nuanced, inclusive, and resilient development strategies attuned to the realities of our rapidly evolving energy and governance landscapes.
Subject of Research: Energy finance, digital financial inclusion, governance accountability, and their combined effects on sustainable development in BRICS countries.
Article Title: Energy finance, digital financial inclusion, accountability and sustainable development: evidence from BRICS.
Article References:
Xia, L., Fatema, N. Energy finance, digital financial inclusion, accountability and sustainable development: evidence from BRICS.
Humanit Soc Sci Commun 12, 1253 (2025). https://doi.org/10.1057/s41599-025-05410-w
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