Nanoscale magnesium oxide (Mg12O12) clusters have enormous applications like toxic gases sensing and removal, high temperature semiconductors, and as drug delivery systems. Mg12O12 nanoclusters gained a massive interest of all the researchers due to their efficient electronic behavior, easy and smart sensing of toxic gases and their removal from environment. In this study, density functional theory (DFT) calculations are employed to examine the change in electronic behavior of Mg12O12 upon copper (Cu) and nickel (Ni) decoration. Additionally, the adsorption of CO2 on Cu and Ni doped Mg12O12 nanoclusters is also estimated through various geometric parameters like adsorption energy, energy band gap, Fermi level, frontier molecular orbitals (FMOs), and natural bond orbital charges (QNBO). The charge separation upon metal decoration and CO2 adsorption are also estimated through molecular electrostatic potential (MEP), and dipole moment analysis. Global indicators of reactivity recommend that M-Mg12O12 (M = Cu and Ni), and CO2-M-Mg12O12 nanoclusters are naturally stable and effective nanoclusters for the development of future CO2 sensing materials.