<p>Environmental issues have become a global concern due to their wide-ranging impacts on human health, ecosystems, and economic stability. Recent environmental assessments often rely on conventional indicators such as CO₂ emissions, greenhouse gases (GHGs), and more recently, the ecological footprint. Although these indicators provide valuable insights, they are largely focused on demand-centric and do not fully capture the supply-side dynamics. As a result, contrary to the previous attempts, this study focuses on Somalia and employs the load capacity factor (LCF) as a gauge of environmental sustainability to quantify how renewable energy, financial globalization, economic growth, and institutional quality affect it. We utilize annual time series data spanning 1990–2021 and an ARDL bound test. The empirical results revealed that renewable energy and financial globalization undermine LCF, whereas institutional quality enhances it. Economic growth reduces LCF, whereas squared growth (GDP²) improves it, hence confirming the U-shaped trajectory that directly supports the LCC hypothesis. Various cointegration methods have robustly verified the long-run results. Nevertheless, the study underlines the importance of investments in cleaner, low-impact renewable technologies, such as solar and wind power, and establishes regulatory frameworks that guarantee that renewable projects comply with environmental standards. The study also suggests enhancing good governance, mitigating corruption, and strengthening institutional capacity that will facilitate the adoption of cleaner energy and foster a more conducive atmosphere for sustainable growth. A solid policy framework focused on clean energy innovation, institutional reforms, and sustainable finance is crucial for enhancing Somalia’s environmental sustainability and long-term resilience.</p>