AbstractFollowing universal debate for energy sources and sustainable development across the globe, with its far‐reaching implications on the environment, this crusade aligns with the United Nations Sustainable Development Goals (UN‐SDGs). The study variables are based on the SDGs‐7, 8, and 13 that highlights access to clean energy, sustainable economic growth and mitigation of climate change issues. Awareness of environmental sustainability has received much consideration because of the hazards associated with climate change issues in recent times. Studies on environmental quality and pollution emissions (CO₂) are becoming increasingly interesting. It is reported that human activities and increasing economic issues resolve environmental‐related challenges. In the light of this, we assess how employment moderates energy consumption and climate change for G7 countries. We utilise panel co‐integration and long‐run regression using dynamic ordinary and fully modified ordinary least squares to institute the magnitude of long‐run elasticity among the outlined variables. Panel heterogeneous techniques are used to detect the direction of causality for the annual data from 1990 to 2016. The empirical result shows a clear significant correlation between variables and the long‐run relationship between pollutant releases and energy utilisation, employment and real output. The study finds an inverse relationship between trade and pollutant emissions, thus suggesting that openness trade mitigates against environmental degradation in the sampled blocs. The causality analysis reveals a bidirectional causality between emissions and employment and a unidirectional causality between emissions, real GDP, energy utilisation and trade. These results have far‐reaching outcomes on environmental fronts and economic growth highlighted in this study.