<p>Greenhouse gases resulting from rising carbon emissions in emerging economies contribute to about 63% of total emissions. With escalating carbon levels posing serious threats to climate systems, emerging economies focus their industrialization strategies on financial inclusion (FI) to promote growth. This research uses a systematic literature review and meta-analysis approach to assess the impact of FI on emerging economies’ carbon emissions by analyzing its role as either a driving force or restraint on environmental sustainability. Following the Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA), 30 empirical studies between 2020 and 2025 are systematically identified from Scopus and Web of Science databases using a mixed-effects meta-regression analysis approach. Results show that there is a large disparity between types of financial mechanisms, where traditional FI positively contributes to rising emissions (β = 0.409, <i>p</i> = 0.008), supporting the scale effect hypothesis, but is subsequently corrected by Digital FI as a significant corrective moderator (β = −0.304, <i>p</i> = 0.009). Results reveal substantial heterogeneity (I² = 95.18%), and the type of financial mechanism explains a meaningful share of between-study variation (R² = 25.49%), suggesting that differences between traditional and digital inclusion channels partly account for divergent environmental outcomes. In conclusion, digital technologies can be essential for decoupling economic growth from environmental degradation in emerging economies. This therefore necessitates that policymakers in emerging economies focus on double-pathway policy: where they need to manage and control the carbon risks posed by traditional finance on one track, while also determining ways to encourage digital financial ecosystems to promote energy efficiency and green innovations; meeting objectives for low-carbon growth on the other track in support of SDGs 7, 10, and 13.</p>