Since reform and opening up, China’s rapid economic development has come at a huge cost in terms of resources and the environment. Striking a balance between economic development and environmental protection has become an urgent and realistic problem to be solved. Strengthening the construction of ecological civilization and promoting comprehensive GT is the only way to achieve high-quality development. In recent years, the Chinese government has attached great importance to the green development of the economy and has introduced many policies to actively guide the GT of the real economy. As a micro-level subject of economic development and environmental protection, the GT of enterprises is not only an effective starting point for a country to promote the GT of its economy but also an important object of attention in formulating green economic policies [1]. Therefore, to achieve the GT of China’s economy, it is necessary to promote the GT of enterprises and achieve the unification of economic, social, and environmental benefits in green development.

With the development of DT such as big data, cloud computing, artificial intelligence, and blockchain, the digital economy, with data as a key factor of production, has ushered in new development opportunities. The China Academy of ICT’s China Digital Economy Development Report (2023) shows that in 2022, China’s digital economy reached 50.2 trillion yuan, a nominal growth of 10.3% year-on-year, which has been significantly higher than the nominal GDP growth rate for 11 consecutive years, and the digital economy accounted for 41.5% of GDP, equivalent to the share of secondary industry in the national economy. In the era of the digital economy, the pace of enterprise digitalization has accelerated, and the promotion of intelligent manufacturing, application of new DT, adoption of Internet business models, and building of modern information systems in production and operation are profoundly changing the production methods, organizational forms, marketing models, management models, and business strategies of enterprises [2]. The digitalization of enterprises is essentially a dynamic process of introducing and applying DT by investing large amounts of capital and human resources to cope with uncertain technological changes and market fluctuations [3]. Promoting the GT of enterprises is a key task in establishing and improving an economic system for green, low-carbon, and circular development, while digitalization has become a major driver of transformation and is considered to have great potential for promoting structural reform on the supply side and achieving sustainable enterprise development [4]. In other words, in the era of the digital economy, the GT of enterprises is no longer simply a matter of technological upgrading, as it has gradually become a strategic choice affecting the green and sustainable development of enterprises [5].

At this stage, the level of initiative for GT in Chinese manufacturing enterprises is poor, and the drivers of transformation mainly rely on external pressure to push enterprises to achieve GT [6]. At the same time, most of the existing empirical studies on GT focus on the macro level, such as cities and industries, while ignoring the behavioral processes in microenterprises’ GT [7]. There is less literature on research from the internal perspective of microenterprises, which makes enterprises’ green transformation behavior lack systematic theoretical guidance. In the context of China’s vigorous digital transformation, social and environmental values are increasingly becoming important elements in building sustainable competitive advantage for companies [8]. This is because digitalization has greatly increased the social transparency of enterprises, information asymmetry has been significantly alleviated, and stakeholders have higher expectations for enterprises to fulfill their environmental responsibilities, which will drive them to take the initiative to make a GT. However, there are currently two main problems with the GT of enterprises. One is the lack of motivation. According to economic theory, the sole purpose of enterprises is to maximize profits. When considering profit, enterprises generally believe that environmental investment will take up some of their productive resources and therefore lack the will to actively invest in environmental protection. Secondly, there is a lack of capacity. The lack of technical and human resources support in the process of GT in enterprises has led to difficulties in identifying environmental problems, information asymmetry, and an insufficient basis for strategic decision making. It has been pointed out that digitalization as part of economic and social development in a wide range of areas will eventually be internalized in the GT of enterprises [9]. Therefore, in the context of the current urgent need to accelerate the development model, the digitalization process of enterprises will provide inspiration for them to further seek green development and adopt GT, which is an important reason for introducing the exogenous variable of digitalization technology in this paper. So, can DT effectively contribute to the GT of enterprises? And how does DT contribute to the GT behavior of enterprises? The innovative exploration of the mechanism of DT’s impact on corporate GT at this stage undoubtedly enriches the current immature theoretical system and analytical framework and is of great theoretical and practical significance to the promotion of corporate GT and sustainable development in China.

DTs are playing an increasingly important role in driving the global economy, impacting society, businesses, and people’s lives [10]. These technologies include but are not limited to big data, artificial intelligence, cloud computing, blockchain, and the Internet of Things [11]. Digital transformation has triggered the transformation of new business models [12] based on new logic and ideas to help companies upgrade their existing technologies, products, and business processes to become more competitive in the marketplace [13]. With the increasing maturity and widespread use of DT, the academic understanding of DT mainly covers three levels: macro, meso, and micro. At the macro level, DT uses data as a key factor of production to promote the reallocation of existing factors of production and carry out a series of economic activities on a network platform [14], thus triggering fundamental changes in social production methods and economic structures and giving rise to a new form of economic development, the digital economy [15]. The deepening application of DT has facilitated the development of the digital economy, while the extensive penetration of new technologies and new economic forms has provided new impetus for economic growth [16]. At the meso level, DT integrates the data resources of all enterprises in an industry to form a data platform [17], and the platform empowers the digital transformation of the industry by improving operational mechanisms, sharing data resources, and choosing different role points, priorities, and methods to continuously promote the digital transformation of the industry [18]. Most of the micro-level-based DT research is for enterprises, emphasizing the application of DT and the process of organizational change. For example, Meng [19] argues that the essence of enterprise digitalization is the corporate strategic behavior of business organizations using DT, but Vial [20] argues that enterprise digital transformation is a process of organizational change in which companies change their path of value creation through the application of DT, thereby improving internal operational efficiency and organizational performance. Taken together, enterprise digitalization encompasses the application of DT at multiple levels, such as production and sales methods, operational decisions, business models, and even value chain relationships, to create and capture enterprise value. Based on existing research, DT has been shown to have a profound impact on business activities. Firstly, digitalization of an enterprise can effectively reduce information communication and transaction costs and improve asset utilization, thereby increasing economic efficiency [21]; secondly, digitalization of an enterprise improves managers’ business perceptions and decision-making capabilities by changing corporate strategies, business processes, products, and services [22], enabling companies to gain a competitive advantage in an uncertain economic environment [23]; thirdly, digitalization technology empowers companies with innovation resources and innovation dynamics, which can enhance the ability of firms to respond to changes in the external environment [24]. Notably, scholars have also found that DTs have an impact on environmental improvement [25] and that they promote healthy and sustainable business development [26]. In the digital age, barriers to business and social communication are significantly reduced, so companies can quickly and accurately capture consumer demand for corporate environmental responsibility [27], while DT drives the ability of companies to fulfill their environmental responsibilities [28]. Furthermore, Camodeca and Almici [29] found that DT significantly improved CSR and helped companies achieve their sustainability goals. In the context of supply chains, the use of big data analytics by companies can positively moderate the relationship between sustainable supply chain management and organizational performance [30]. With digital transformation opening up new growth opportunities for businesses and corporate environmental management being a key corporate governance issue, there is an urgent need to clarify how companies can effectively use DT to enhance the effectiveness of corporate environmental management. The GT of enterprises is generally considered to be the initiative of enterprises to adjust their strategies to reduce resource consumption and change from a wasteful and polluting development model to a green and sustainable development model that conserves resources and protects the environment [31]. GT can effectively help enterprises bring about the value of symbiosis between ecological and economic benefits, ultimately leading to an optimal allocation of resources. Existing studies have mainly explored the factors influencing the green transition from the perspectives of external and internal factors. From the perspective of external factors, most scholars study the impact of environmental regulations on GT. For example, environmental regulations [32], low-carbon policies [33], environmental taxes [34], and other environmental regulations can effectively restrain the behavior of enterprises, raise their awareness of environmental protection, prompt them to implement green business concepts, and promote their green and sustainable development. At the same time, the government compensates for the high costs and risks associated with GT through government subsidies to motivate enterprises to actively carry out GT [35]. The strong influence of the external environment on the GT of enterprises is also reflected in the pressure from stakeholders to adopt environmentally responsible behavior. Green products can bring private benefits to stakeholders in addition to the public benefits of reducing environmental pollution [36], so the environmental needs of customers, suppliers, and other stakeholders can also influence corporate green behavior [37]. Telecommunications infrastructure development can improve the level of information technology of enterprises, increasing the space for progress and the speed of dissemination of green technologies, thus creating incentives for sustainable development [38]. A sound financial mechanism can provide financing services to enterprises and increase liquidity, thus encouraging innovation [39], so developing green finance can help stimulate enterprises and promote new green projects [40]. As far as internal factors are concerned, scholars have analyzed and discussed them mainly in terms of corporate organizational characteristics. For example, corporate governance structures [41], organizational resources [42], and the environmental awareness of executives [43] can promote active environmental projects internally, shape employees’ environmental behavior [44] and help companies achieve their green development goals. In addition, technological innovation is believed to have a driving effect on corporate transformation [45]. Endogenous growth theory suggests that technological progress is an important cause of sustained corporate growth [46], and technological innovation has an important impact on the green development aspect of a company by improving production efficiency and reducing production costs through technological advances [47]. Green technological innovation can reduce environmental pollution, save energy, and achieve green and sustainable development balancing environmental protection and enterprise competitiveness [48], which is a key path to harmonious economic and environmental development. On the adoption of GT behaviors by enterprises, existing research has focused on two aspects, namely green strategy and green innovation [49]. On the one hand, corporate transformation requires strategic leadership [50], and Sun [51] argues that corporate GT is essentially strategic transformation, while Eric and Olson [52] argue that green strategy fundamentally helps companies make decisions to improve the environment as well as facilitate corporate transformation. On the other hand, green technology innovation enhances the ability of firms to carry out green production, and it is the key to the GT of firms [53]. Xiao [54] found that green innovation capability can effectively improve GT performance after histological analysis of manufacturing GT cases and that technological conditions play a central role. Li [48] further proposed that green innovation is an inexhaustible driving force for the green development of manufacturing enterprises, which not only helps to improve the environmental pollution problems of enterprises but also helps to improve enterprise performance. Green strategy and green innovation are closely related: to carry out green innovation, enterprises need to adopt green strategy measures for orientation first, and green innovation in turn realizes the value of green strategy [55]. Green strategy and green innovation integrate corporate GT behaviors and together have a positive impact on corporate transformation performance.