The advancement of metal-catalyzed copolymers is a formidable challenge for achieving distinct catalytic properties to compete with existing plastic polymers in industrial commodities. Herein, we reveal the roles of electronic and steric environments in the thermodynamic preference of microstructures in ethylene/divinyl formal (DVF) co-polymerization using a Pd catalyst under mild conditions to accommodate the respective industrial applicabilities. The insertion products of DVF result in the alteration of the steric crowding, ultimately favoring the efficient formation of cyclic units having potential applications in the manufacture of high-strength fibers. More specifically, to achieve an improved yield of the end copolymer, we tuned the catalytic activity and regioselectivity through a variety of catalysts during ethylene-DVF co-polymerization. The naphthalene-bridged (P^O)PdMe catalyst was found to be promising in terms of the least hindered (buried volume of 47.8%) environment with the thermodynamic preference of 2,1-insertion with an energy of 5.1 kcal mol-1 among all the Pd-metal based catalysts. The highest activity with moderate energy barriers of the proposed catalyst will open new avenues for achieving a variety of potential applications, which is typically not possible using existing polymerization techniques.