Mitigating environmental degradation requires major innovations in environmental sustainability practices. An innovative approach for organizations to achieve sustainability objectives involves the utilization of self-organizing and self-optimizing systems integrated with digital technologies, referred to as ‘digital green fusion’. In our study, we utilize the natural resource-based view as a theoretical framework to elucidate the mechanism of digital green fusion. We also examine digital-enabled green practice (DEG) and green-oriented digital practice (GED) as two key facilitators that provide avenues for organizations to enhance sustainable performance under institutional pressures. We conducted a survey involving 220 Chinese firms, followed by the utilization of hierarchical regression analysis to evaluate the proposed hypotheses. Our empirical findings from this sample of 220 Chinese firms reveal that regulatory and competitive pressure are positively associated with DEG and GED, while customer pressure does not exhibit a significant relationship. Besides, both DEG and GED exhibits noteworthy positive associations with sustainable performance. Our contribution to the field of sustainable development lies in revealing the digital green fusion mechanism, as well as elucidating its drivers and impacts. Additionally, our findings hold significant implications for both business organizations and governmental bodies in terms of realizing the sustainability within the broader context of the ongoing digital transformation.
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