Digital Transformation As A Catalyst For Environment Sustainability In Small And Medium Business

Abstract

In a time of rapid technological disruption and worldwide environmental challenges, Small and Medium Enterprises (SMEs) have a double imperative: to stay competitive and be sustainable. Empirical in its approach, this study examines the potential of digital transformation as a driver for environmental sustainability in Indian SMEs. Based on the Resource-Based View (RBV) and Technology Organization Environment (TOE) framework, it theorizes digital transformation in three dimensions, namely digital infrastructure, digital capability, and innovation orientation and studies their impact on environmental sustainability outcomes. A systematic survey was conducted with 180 owners and managers of SMEs belonging to manufacturing, service, and retail industries. Data were analyzed through descriptive statistics, correlation, and multiple regression analysis using SPSS 28. The results show that all three dimensions of digital transformation positively and significantly predict environmental sustainability, explaining its variance collectively to the tune of 56%. Innovation orientation was the greatest predictor. This research adds to the body of evidence on green digitalization by emphasizing what SMEs can do to utilize technology for eco-efficiency, waste minimization, and greater compliance with sustainable development objectives. Practical policy and SME leadership recommendations are provided to speed up the shift toward green digital ecosystems.