This study assesses the interactive nexus between digital financial inclusion (DFI), institutional quality (INQ), renewable energy (REN), inclusive economic growth (PGDP), and environmental sustainability (ENS) in Nigeria, using the Dynamic Autoregressive Distributed Lag (DARDL) model within the EKCSTIRPAT framework. The results confirm the N-shaped EKC hypothesis, where PGDP initially degrades ENS (0.389 to 0.720) and improves it at transitional income levels (PGDP²: -0.810 to -0.812), but further economic expansion leads to renewed ENS degradation (PGDP³: 0.673 to 0.82). The results reveal that DFI alone is insufficient to enhance ENS; however, DFI-INQ interaction significantly improves ENS (-0.614 to -0.871 in the long run; -0.560 to -0.712 in the short run), underscoring the importance of governance, regulatory enforcement, and green financial policies. Industrialization (IND) and urbanization (URB) exhibit mixed effects, while energy consumption (EC) degrades the ENS (0.324 to 0.731). REN enhances ENS in the long run (0.509–0.915), but imposes short-run trade-offs (-0.576 to -0.897). The ECM confirms rapid adjustments (-0.871 to -0.950), emphasizing Nigeria’s financial system’s responsiveness to ENS shocks. These results offer policy insights into leveraging DFI and INQ reforms to foster a sustainable financial ecosystem that balances PGDP with ENS.