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Digital Transformation and Environmental Sustainability in SMES: A Contingency Analysis of Organisational Capabilities and Market Demand

Year: 2026

Type: article

Abstract: ABSTRACT This study examines how Industry 4.0 adoption breadth and organisational capabilities are associated with environmental sustainability in manufacturing SMEs. Drawing on a capability‐based perspective, it develops and tests a contingency model linking Industry 4.0 adoption, managerial commitment, market demand for sustainable products, and social sustainability. Using cross‐sectional survey data from manufacturing SMEs and a generalized ordered logit model, the analysis captures threshold‐specific associations across levels of environmental sustainability. The findings show that Industry 4.0 adoption is positively associated with environmental sustainability, whereas managerial commitment is associated with higher performance only at more advanced levels. By contrast, market demand shows a negative direct association at low and intermediate thresholds, suggesting that external demand may create resource‐diversion pressures when internal capabilities are insufficient. Social sustainability emerges as a key enabling capability, strengthening the associations between managerial commitment, market demand, and environmental sustainability. Overall, the study advances a contingency‐based understanding of the twin transition by showing that broader Industry 4.0 adoption is associated with environmental gains mainly when supported by adequate internal organisational capabilities.

Source: Corporate Social Responsibility and Environmental Management

DOI: 10.1002/csr.70979

Authors: Guillermo Bermúdez‐González, Ana Isabel González‐Fernández, Eva M. Sánchez‐Teba

Institution: Universidad de Málaga

Language: English

Topic: Digital Transformation in Industry

Subfield: Industrial and Manufacturing Engineering

Field: Engineering

Domain: Physical Sciences

SDGs: Industry, innovation and infrastructure, Responsible consumption and production, Decent work and economic growth, Climate action

Open Access status: hybrid

Estimated APC paid: $4,100