The crucial role of finance in addressing environmental challenges has become increasingly important. The COVID-19 outbreak has further magnified the significance of green finance (GF) in promoting sustainable development, improving quality of life and environmental protection. In the present study, we analyze the role of financial development (FD) and GF in CO2 emissions (CEM) in Brazil, China, India and South Africa (BICS) economies during 2000–2022 using the Driscoll- Kraay Standard Error estimation approach. Our findings demonstrate that GF plays a significant role in mitigating CEM but FD enhances it. Moreover the results of Dumetriscu and Hurlin Panel Causality test show that both GF and FD do not cause CEM in BICS countries. Based on the findings of the study, governments of BICS economies are recommended to implement fiscal policy tools and green financing measures to encourage green investment, which can create new opportunities for sustained growth and help to mitigate the dangers of climate change, particularly during a post-pandemic economic recovery. The study contributes to the energy-environment literature by explaining how green financial flows can support low-carbon development in high-emitting emerging economies.