This study examines the impact of green finance (GFIN) and green innovation (GTI) on environmental sustainability in seven South American countries from 2000 to 2020. Design/methodology/approach The study employs panel data econometric techniques using the Method of Moments Quantile Regression approach to explore the relationships between carbon dioxide (CO2) emissions, GFIN, GTI, economic growth (GDP), renewable energy (REN) and non-renewable energy (NRE) globalization (GLO) and population (POP). The robustness of the results is confirmed through additional analyses using bootstrap quantile regression, feasible generalized least squares and panel corrected standard errors. Findings The findings reveal that GFIN significantly reduces CO2 emissions across all quantiles, with stronger effects at higher quantiles. However, GTI shows a positive association with emissions in higher quantiles, suggesting rebound effects. Renewable energy decreases emissions, while NRE, GLO, population and GDP growth contribute to environmental degradation, indicating no evidence of the environmental Kuznets curve hypothesis. Additionally, the Dumitrescu-Hurlin causality test reveals bidirectional causality between carbon dioxide (CO2), GDP, NRE and POP, and unidirectional causality from CO2 to GFIN, GTI and REN, highlighting dynamic interactions. Practical implications The results suggest that policymakers should promote accessible GFIN, enhance the efficiency of green innovation and invest in REN sources to support environmental sustainability. Originality/value This study offers novel insights by applying a quantile-specific approach to examine the impacts of GFIN and innovation on environmental sustainability in South America, addressing a significant gap in the literature where such distributional effects in emerging economies have been largely overlooked.