Purpose This study aims to investigate how green banking practices and perceived organizational support toward the environment shape employee environmental commitment and proactive environmental behavior in the banking sector, drawing on social exchange theory, the resource-based view and conservation of resources theory. Design/methodology/approach This study used cross-sectional survey design and data were collected from employees of the banking sector in Türkiye. The authors assessed the proposed moderated mediation model with structural equation modeling. Findings The results indicate that green banking practices have a direct and indirect positive effect on proactive environmental behavior through employee environmental commitment. In addition, perceived organizational support toward the environment reinforces the green banking practices-employee environmental commitment relationship and thus has a positive moderating indirect effect on proactive environmental behavior. Research limitations/implications The cross-sectional design and reliance on self-reported data limit causal inference. Practical implications The results indicates that banks should engage employee to engage with sustainability initiatives and that matching green practices with organizational support that is visible and legitimate would help banks develop employee commitment to sustainability initiatives. Such support, in contexts which are highly regulated and hierarchical, may be helpful for employees to view sustainability efforts as an essential part of their job rather than an additional demand. Originality/value This study contributes by embedding structural green practices and psychological support mechanisms into a moderated mediation framework and provides contextual evidence from a less researched banking industry of an emerging market.
Purpose The purpose of this study is to examine how green marketing influences environmental, social and governance (ESG) performance through total quality management (TQM) and how green (sustainable) leadership moderates this mechanism.Design/methodology/approach The design of this study was explanatory and cross-sectional. A sample of 119 full-time employees of small but growing automotive companies in Ghana responded to an online survey questionnaire. The authors analysed the collected data using SmartPLS 4 at the 5% significance level.Findings Green marketing significantly strengthened TQM and ESG performance. TQM partially mediated in the green marketing-ESG performance relationship. The green marketing-TQM and TQM-ESG performance relationships were significantly reinforced when green leaders were present.Research limitations/implications Future research should focus exclusively on managerial respondents for strategic constructs or use hierarchical linear modelling to account for nested data structures. They should introduce other mediators into the green marketing-ESG performance.Practical implications Marketing managers should collaborate with quality managers to develop claim substantiation protocols before launching green campaigns. Consumers should choose companies that support their marketing claims with transparent quality metrics and consistent leadership messaging. Investors should choose companies that make sustainability a fundamental aspect of operational excellence. Regulators should mandate companies to report on the specific quality management processes supporting their environmental marketing claims.Originality/value To the best of the authors' knowledge, this study is the first to show that ESG performance arises from the systematic integration of environmental consciousness in core organisational processes. It uses sustainable leadership to resolve the conflicting perspectives in the green marketing and TQM literature, contributing to the fields of sustainability, marketing, operations management and leadership.
Purpose In recent years, there has been a growing trend to understand individuals' purchase intentions and responsible consumption habits within the framework of the sustainable development goals. However, research on the psychosocial antecedents of sustainable purchase intentions and consumption behaviors remains insufficient. Based on goal-framing theory and the theory of reasoned action, this study aims to examine the effects of hedonic and gain goals, personal attitudes and subjective norms on sustainable purchase intentions and behaviors.Design/methodology/approach Data were collected from 564 consumers across T & uuml;rkiye via a survey and analyzed using Smart PLS 4 and structural equation modeling.Findings Hedonic goals, personal attitudes and subjective norms positively influence sustainable consumption intentions. Additionally, gain goals positively impact personal attitudes and subjective norms but do not directly affect sustainable consumption intentions. Personal attitudes and subjective norms strongly influence sustainable consumption intentions, and these intentions, in turn, guide sustainable consumption behaviors. Finally, mediation analyses confirm that hedonic and gain goals indirectly influence sustainable consumption intentions through personal attitudes and subjective norms.Originality/value This study contributes to the literature by integrating goal-framing theory and the theory of reasoned action to explore psychosocial antecedents of sustainable consumption. It uniquely highlights the indirect effects of hedonic and gain goals on sustainable consumption intentions via personal attitudes and subjective norms.
Purpose This study aims to investigate the impact of green finance (GF) on environmental performance (EP). It further examines how country-level cultural dimensions such as uncertainty avoidance (UCA) and long-term orientation (LTO) interact with this relationship. In addition, the moderating role of sustainable development (SD) at the country level is also explored.Design/methodology/approach The study uses comprehensive measures of GF and EP for a sample of 44 countries across different global regions during 2016-2020. EP is proxied using a composite index of environmental degradation based on the consumption of non-renewable and natural resources, where lower degradation indicates better EP. The system generalized method of moments serves as the baseline estimation technique, while two-stage least squares with instrumental variables (IVs) is applied for robustness checks. An extended model incorporating CO 2 emissions and a country-development dummy variable is also estimated for additional validation.Findings The results reveal a significant negative effect of GF on EP, indicating that higher levels of GF contribute to lower environmental degradation and, hence, improved EP. Furthermore, countries exhibiting higher UCA and LTO scores demonstrate stronger mobilization of GF toward reducing environmental degradation. The moderating analysis further shows that the negative association between GF and EP remains significant for countries with high levels of SD. It suggests that SD enhances the environmental benefits of GF, while it becomes insignificant for countries with lower levels of SD.Originality/value By using a comprehensive framework for measuring both GF and EP, this study makes a novel contribution by integrating Hofstede's cultural dimensions, such as UCA and LTO, into the analysis of the GF-EP relationship across a global sample of 44 countries.
Purpose This study aims to investigate how firm value (FVA) affects Environment, Social and Governance controversies (ESGC), testing whether strong Environmental, Social and Governance practices (ESGP) and greater gender diversity on corporate boards (BGED) mitigates negative market reactions. Design/methodology/approach Using a quantitative research approach, this study conducts panel data regressions on a sample of 3,584 observations from companies listed in the STOXX 600 index over the period spanning from 2015 to 2023. Findings The results demonstrate a significant negative association between ESGC and FVA. However, this relationship is mitigated by greater BGED and strong ESGP, which enhance firms’ resilience to reputational risks. Originality/value These findings are likely to be of interest to scholars, corporate leaders and regulatory bodies seeking to explore how ESGC, FVA, ESG-driven initiatives and internal governance interact to shape sustainable business practices and mitigate reputational risks.
PurposeThis study aims to understand the influence of environmental, social and governance (ESG) and individual scores on the performance of mutual fund schemes (using net asset value, Treynor ratio and total expenses ratio as performance indicators). The relationship between aggregate and disaggregate ESG score and fund performance is assessed under the theoretical lens of modern portfolio and stewardship theory.Design/methodology/approachThe hand-picked data from 110 Indian equity-diversified mutual fund schemes for nine years (2015-2023) are used in the research. Static panel data econometrics is applied for empirical data analysis.Findings ESG and social score positively affect the Treynor ratio and NAV, respectively. On the contrary, the governance score has a negative effect on the NAV and Treynor ratio individually. However, the environmental score has no influence on the Treynor ratio and NAV. ESG, environmental and social scores have a negative influence on the TER. By contrast, governance has a positive influence on the TER.Practical implicationsThis research outcomes will assist investors and fund managers in making logical investment decisions to maximize return while minimizing risk. The outcome of this study helps the investor underscore the significance of integrating ESG factors into investment portfolios.Originality/valueInterestingly, there is a dearth of research on mutual funds and understanding the performance evaluation of different funds. However, studying the sustainability aspect of the Indian equity diversified fund is rare. The research findings sustainably contribute to the existing body of literature through its novel and robust evidence on the influence of aggregate and disaggregate ESG scores on the NAV, Treynor ratio and TER. As a result, this work stands out for being distinctive and makes various contributions to the scholarly conversation.
Purpose As planetary crises continue to pose serious risks for humanity and the Earth, interorganizational collaboration is increasingly recognized as essential. However, the complexities inherent in interorganizational collaboration to address global challenges are frequently underestimated or misunderstood. To that end, this paper aims to explore what might be done to deepen the collective understanding of research and theory development that may ultimately enhance research and subsequent theory development to better inform practice. The objective is to contribute to scholarly discourse within and across scientific communities, fostering a more optimistic outlook on the potential impact of collective research endeavors. Design/methodology/approach The essay forms part of a longstanding research agenda into governing, leading and managing interorganizational collaboration aimed at addressing major societal challenges including, more recently, a focus on collaboration and conservation. The approach for this essay includes extensive cross disciplinary reading and careful synthesizes of literature on interdisciplinary and interorganizational collaboration from both natural and management sciences, spanning six decades. Secondary sources include reports from the European Commission, United Nations and the World Economic Forum. Key search criteria included interorganizational collaboration, global challenges and environmental sustainability. Findings The essay identifies pivotal issues that impact the relevance of research and theory on interorganizational collaboration for global challenges. It develops four suggestions aimed at enhancing research and theory development, thereby providing more robust foundations to inform practice. Social implications The ultimate research aim is the well-being of the Earth. Originality/value The essay provides an original perspective on interorganizational collaboration for global challenges along with four suggestions that may help increase the relevance of future research and theory development.
PurposeThis study aims to identify and prioritize the elements and sub-elements of corporate social innovation (CSI) practices that can enhance the effectiveness of corporate social responsibility (CSR) programs by addressing societal issues effectively. This study aims to develop a strategic framework that aligns business objectives with community needs and interests.Design/methodology/approachA mixed-methods approach was used. First, an exploratory factor analysis (EFA) was performed to validate and group the 26 CSI sub-elements into six major elements, based on responses from CSR employees and nongovernmental organizations. Second, the analytic hierarchy process (AHP) was used to assign priority weights to each element and sub-element, enabling their strategic ranking. This two-phase methodology seeks to provide a concrete framework for policymakers to implement CSR programs effectively.FindingsThe study results show that livelihood development, capacity building and community engagement are the most critical elements of CSI that need to be present for effective CSR implementation. Financial support, employment and self-employment emerged as top priorities among the sub-elements. The prioritization framework developed in this study enables organizations to design targeted and innovative CSI strategies that drive societal value while enhancing corporate performance.Originality/valueThis study contributes to the limited body of empirical research that systematically identifies and prioritizes the elements and sub-elements of CSI in the Indian mining industry by applying EFA and AHP methodologies. The resulting prioritization model offers practical value for CSR managers who strategically plan and implement impactful programs, while enriching the broader literature on CSI and CSR.
Purpose-This study aims to explore the intersection of stakeholder engagement and small and mediumsized enterprises (SMEs). While stakeholder engagement has been widely studied in large corporations, its role in SMEs and its impact on resilience and business innovation remain underexplored. Design/methodology/approach-A bibliometric-systematic literature review was conducted, analysing 97 peer-reviewed articles from Scopus. Keyword co-occurrence analysis identified key thematic clusters, including environmental sustainability, innovation management and collaboration strategies, as critical factors for effective stakeholder engagement in SMEs. Findings-The study highlights future research directions, such as stakeholder engagement mechanisms, cross-sector comparisons and technology impact on engagement practices. The findings suggest targeted strategies to optimise stakeholder engagement in SMEs, enhancing their sustainability and competitiveness. Originality/value-This study fills a significant gap by linking stakeholder engagement to SMEs, offering a broad picture of the current research and a future agenda that aligns engagement strategies with sustainable business practices.
PurposeThe purpose of this study is to examine the nonlinear relationship between corporate social responsibility (CSR) and dividend policy in the MENA context. This study specifically investigates whether the level of CSR matters in the CSR-dividend payout nexus.Design/methodology/approachThis study is based on a sample of 156 non-financial firms over the period from 2011 to 2021. A dynamic panel threshold model is adopted to investigate the nonlinear relationship between CSR and dividend payout.FindingsThe authors find a nonlinear association between CSR and dividend payout policy. More precisely, results show a positive impact of CSR on dividend policy below a certain threshold. This becomes negative above the threshold value. A set of robustness checks confirms the existence of a nonlinear impact of CSR on dividend payout.Research limitations/implicationsThe findings of this study help investors, shareholders and policymakers better account for nonlinearity and offer new insights for managing the impact of CSR on dividend payout policy.Originality/valueAlthough little previous research has focused on the CSR-dividend payout nexus, to the best of authors' knowledge, the authors believe that this is the first study to examine the nonlinear influence of CSR on dividend policy using a dynamic panel threshold model in the MENA context.
PurposeThe purpose of this paper is to examine the association between growth opportunity and climate change disclosure (hereafter CCD) and whether this relationship is moderated by green bond finance in the US setting.Design/methodology/approachThe sample comprises 6,048 firm-year observations over the period of 2010-2023. CCD is assessed using three proxies: a binary indicator of scope 1, 2 and/or 3 emissions disclosure; a 0-3 scoring for the disclosure quality; and a proportional score disclosure ratio. Market-to-book ratio measures growth opportunities, and green bond issuance operationalises green financing. Hypotheses are tested using robust panel regressions and moderation analysis.FindingsThe findings of this study indicate that corporate growth opportunities positively affect the CCD, thereby enhancing the company's environmental reporting. In addition, results from the moderating effect show that green financing, measured by green bond issuance, enhances the effect of growth opportunities on CCD.Practical implicationsThis study offers new insights for managers to align growth strategies with climate accountability, for policymakers to promote green financing and for investors to prioritise companies that balance profitability with environmental limits. Mandating Scope 3 disclosures and expanding green bond frameworks are essential for enhancing this synergy.Originality/valueThis research enhances the discussion on sustainable corporate and climate disclosure by empirically investigating the effect of growth opportunities on CCD. This study also looked at how green financing influences this relationship, creating a useful model for companies worldwide to balance making profits and being environmentally responsible.
PurposeAs global environmental and social challenges intensify, manufacturing firms face increasing pressure to integrate sustainable practices and drive responsible innovation. This study aims to assess the relationship between responsible leadership; organizational culture; Environment, Social and Governance (ESG) practices; and eco-innovation within manufacturing organizations. It seeks to understand how they adapt to these challenges by integrating ESG practices and promoting eco-innovation by undertaking responsible leadership and applying mechanisms of organizational culture.Design/methodology/approachData were collected via a structured questionnaire completed by 188 manufacturing firms in Santa Catarina, Brazil. This study used partial least squares structural equation modeling for hypothesis testing.FindingsResults highlight that ESG practices have a significant impact on eco-innovation. Organizational culture plays a pivotal role in enabling ESG practices, while responsible leadership influences organizational culture but does not directly impact ESG practices. This indicates a reactive and incremental leadership style in most firms; one that focuses on meeting market demands rather than driving proactive changes.Research limitations/implicationsThis study advances theoretical understanding by showing that the impact of responsible leadership on ESG adoption is conditional and mediated by organizational culture. It also addresses research gaps by empirically examining these dynamics in the context of an emerging economy, and thus is a response to calls in the literature for more studies on responsible leadership, ESG and eco-innovation.Practical implicationsFindings emphasize the importance of aligning organizational culture and leadership with ESG objectives and organizational strategies to promote sustainable innovation. Companies can leverage strong cultural frameworks to enhance ESG adoption and foster eco-innovation, thereby improving resilience and competitiveness in the face of environmental and social challenges.Social implicationsThis study underscores the importance of active stakeholder engagement and corporate initiatives aligned with Sustainable Development Goals.Originality/valueThis study contributes to the literature on sustainability by examining the interrelated roles of leadership, culture and ESG practices in fostering eco-innovation. By linking these dynamics to Stakeholder Theory, it emphasizes the need for integrative leadership styles and stakeholder engagement to drive transformational change aligned with the global goals of sustainability.
PurposeThis study aims to explore the mediating and moderating roles of trust in managers and well-being at work in the relationship between corporate ethical values and organizational commitment.Design/methodology/approachThis study surveyed 218 employees from a regional bank in Semarang, Indonesia, using covariance-based structural equation modeling using SPSS AMOS 21 to examine the relationships between corporate ethical values, trust in managers and organizational commitment, as well as the effects of trust in managers and employee well-being.FindingsThis study found that corporate ethical values are positively correlated with both organizational commitment and trust in managers. However, trust in managers did not significantly influence organizational commitment, and employee well-being did not moderate the relationship between corporate ethical values and organizational commitment.Research limitations/implicationsThis study is limited by its focus on the banking sector, the complexity of the reciprocal relationship between ethics and organizational commitment and the need for additional control variables like age and job position to improve the understanding of exogenous factors affecting employee commitment, suggesting that future research should incorporate diverse sectors and a broader set of variables for more comprehensive insights.Practical implicationsOrganizations can enhance organizational commitment by emphasizing the implementation of ethical values. Clear distinctions between ethical and unethical behaviors can help prevent fraudulent activities and promote a positive workplace atmosphere.Originality/valueThis research provides new insights into how corporate ethical values directly impact organizational commitment, showing that trust in managers and employee well-being do not significantly influence this relationship, emphasizing the direct importance of ethical practices.
PurposeThe Corporate Sustainability Reporting Directive (CSRD) requires organizations to develop the capability to collect, process and report extensive sustainability data electronically. Drawing on Organizational Information Processing Theory and Dynamic Capability Theory, this study aims to examine how organizations can use digital transformation tools to enhance their CSRD readiness, with a focus on the mediating role of data analytic capability.Design/methodology/approachAn online cross-sectional survey was administered to key informants from large companies and small and medium enterprises (SMEs) located in the European Union to examine whether digital transformation tools contribute to CSRD readiness. The mediating effect of data analytic capability and the moderating effect of data-driven culture were tested using partial least squares structural equation modeling.FindingsThe study's findings showed that, for SMEs and large organizations alike, those that had implemented digital transformation technologies with a strong supply chain and/or inter-firm perspective had a better-developed data analytic capability, which in turn was positively associated with CSRD readiness. While the mechanism was similar for large organizations and SMEs, large organizations were significantly ahead in developing their CSRD readiness.Practical implicationsOrganizations should approach CSRD compliance, and more generally, sustainability reporting practices, as a strategic capability-building initiative rather than a mere regulatory burden. SMEs in particular should prioritize developing data analytic capability through targeted technology investments, as this capability not only enables sustainability reporting compliance but also enhance their competitive position as trusted supply chain partners.Originality/valueThe study demonstrates how data analytic capability acts as the mechanism through which organizations translate investments in technology into improved organizational capabilities required for CSRD readiness.
Purpose Sustainability reporting (SR) in Cooperative Credit Banks (CCBs) plays a pivotal role in enhancing transparency, building stakeholder trust and aligning cooperative values with broader sustainability objectives. This study aims to explore the key barriers and benefits associated with SR practices within the Italian CCB context. Design/methodology/approach To address the research gap, this study adopts a qualitative methodology, conducting a single case study within the Italian context, specifically focusing on the CCB of Santeramo in Colle. Findings The findings highlight four key areas related to barriers and benefits: technical and operational, economic and competitive, cultural and organizational, and regulatory. While SR strengthens corporate culture, stakeholder trust and strategic positioning, challenges persist in terms of data integration, Environmental, Social, and Governance (ESG) indicator conversion and resource allocation. Originality/value To the best of the authors’ knowledge, this is the first study investigating both the barriers and benefits of SR within Italian CCBs through a qualitative lens. It provides original insights by exploring the internal dynamics between local banks and the parent group, offering a novel application of institutional theory – specifically coercive isomorphism – in this context.
PurposeThis study aims to explore the role of small and medium-sized enterprises (SMEs) in the evolving landscape of sustainability reporting within the European Union (EU). It focuses on the indirect but significant implications of the Corporate Sustainability Reporting Directive (CSRD) for SMEs, particularly through their integration into value chains and the multilevel sustainability enforcement system established by the EU.Design/methodology/approachThis study uses a doctrinal legal analysis of the CSRD and related EU regulations, combined with a systematic review of current academic and regulatory literature. Particular attention is given to the proportionality principle and the role of digital technologies in facilitating or hindering compliance by resource-constrained SMEs.FindingsThis research finds that while the CSRD offers SMEs potential benefits, such as enhanced competitiveness, investment readiness and alignment with future regulatory expectations, it also presents significant challenges. These include limited ESG expertise, data collection burdens and difficulties in aligning with evolving reporting standards. This paper highlights how digitalisation, though promising, requires tailored implementation to support SME capacities. It also emphasizes the enabling role of public authorities, larger corporations and industry associations in fostering SME compliance.Originality/valueThis paper contributes to emerging scholarship by reframing SMEs as critical actors in EU sustainability governance. It offers original insights into how legal, technological and policy mechanisms intersect to shape SME reporting practices, and it proposes specific recommendations for ensuring that proportionality and digital enablement are integrated into future sustainability reporting frameworks.
Purpose How can small and medium-sized enterprises (SMEs) effectively digitalize their sustainability reporting processes through a structured, maturity-based adoption model? The purpose of this study is to provide a clear roadmap for advancing sustainability reporting capabilities in alignment with digital transformation. Design/methodology/approach This study builds on a systematic literature review of 32 research publications indexed in Scopus, comprising 22 journal articles and 10 conference papers published between 2014 and 2024. This study employed an inductive thematic analysis process to develop a conceptual model. Findings The study identified a four-stage digital maturity model that helps progress enterprises in the digitalization of sustainability reporting, such as initiation, development, integration and optimization. A coding framework was established to categorize the literature into three themes: digital transformation and maturity models, organizational enablers and resource capabilities, and external pressure and sustainability compliance. The model demonstrates that digital advancement enhances sustainability disclosures’ accuracy, efficiency and strategic value. While larger firms typically progress more rapidly, SMEs often face barriers such as limited resources and technological capabilities. Research limitations/implications This study offers a conceptual framework for understanding the digitalization in sustainability reporting; it is limited by its theoretical nature and lack of empirical validation. Further empirical research is needed to validate the framework across different enterprises sizes, sectors and geographies. Practical implications The maturity model serves as a diagnostic tool that enterprises can use to assess their current stage of digital maturity and identify areas for improvement. Social implications The study provides a new model for understanding digital transition in sustainability reporting, which advances the theoretical disclosure by proposing a novel approach to understanding the integration of digital tools in sustainability reporting practices. Originality/value This conceptual approach enables the development of theoretical foundation for future empirical research and provides a practical guide for enterprises and policymakers seeking to advance sustainability reporting through digital transition.
PurposeThis study aims to investigate the factors influencing the adoption of FinTech services by small and medium enterprises (SMEs) to enhance their performance in achieving Sustainable Development Goals (SDGs). By employing the Unified Theory of Acceptance and Use of Technology (UTAUT), the research explores the role of performance expectancy, social influence, facilitating conditions, effort expectancy and experience in shaping SMEs' intention to adopt FinTech solutions.Design/methodology/approachThe study utilized a Likert-based questionnaire to collect data whereas structural equation modeling (SEM) was used for hypothesis testing and analysis. This study has identified through Bureau van Dijk the all the Italian Innovative SMEs (n. 2,197).FindingsThe results indicate that performance expectancy, social influence, facilitating conditions and effort expectancy significantly and positively affect SMEs' intention to adopt FinTech services. Furthermore, experience with digital technologies enhances this relationship, emphasizing the importance of digital readiness in leveraging FinTech for SDG-related performance.Originality/valueTo the best of the authors' knowledge, this study is among the first to link FinTech adoption with SDG performance in SMEs, applying UTAUT to provide a holistic understanding of the factors influencing technology acceptance in sustainability-focused business practices.
PurposeThis study aims to investigate the readiness of medium-sized industrial small and medium-sized enterprises (SMEs) for the twin transition. It introduces the digital-sustainability readiness index (DSRI), a composite indicator to assess firms' capacity to integrate digital technologies and sustainability practices. Addressing a gap in environmental, social and governance (ESG) and digitalization research, the DSRI measures internal maturity across processes, systems and disclosures. In light of regulatory shifts like the European Union Corporate Sustainability Reporting Directive and double materiality reporting, the study explores how digital-sustainability readiness relates to financial performance, offering a tool to evaluate transformation potential and guide strategic adaptation in the evolving landscape of sustainable and digital innovation.Design/methodology/approachThe DSRI is based on three standardized proxies: value added per employee (productivity), share of university graduates (human capital) and tangible investments (infrastructure). The analysis draws on 24 sectoral-territorial clusters of Italian medium-sized enterprises, using data from the Unioncamere-Mediobanca report (2011-2020), which covers 4,000 firms with 50-499 employees and revenues between 16 and 355m. These clusters represent Italy's medium-sized business fabric. Time series analysis and ordinary least squares (OLS) regression were used to test the relationship between DSRI and average return on investment (ROI), accounting for industry and regional factors to assess digital-sustainability readiness and its link to firm performance.FindingsThe analysis demonstrates a positive and statistically significant relationship between the DSRI and firms' economic performance. This confirms that digital and organizational readiness can act as strategic enablers of profitability in the context of sustainability reporting obligations. Industry-specific factors play a more decisive role than regional ones: sectors such as food and chemical-pharmaceutical consistently show higher DSRI and ROI values, while the geographical macro-area (North, Center and South) does not emerge as a significant determinant. The time series trend analysis confirms the structural stability of the indicators, justifying the use of 10-year averages and reinforcing the robustness of the index.Research limitations/implicationsThe DSRI contributes both theoretically and practically. For researchers, it offers a structured and replicable framework for measuring SME readiness in the digital-ESG domain, expanding the application of the resource-based view and intellectual capital theory to sustainability reporting. The DSRI provides a diagnostic and benchmarking tool for practitioners and policymakers to support strategic decision-making, identify systemic weaknesses and design targeted policy interventions. It can help prioritize public investment, guide incentive schemes and support capacity building in sectors lagging in digital sustainability integration.Originality/valueThis paper provides a unique contribution by proposing an original, empirically validated composite indicator explicitly designed for medium-sized firms, central to the European economy but often overlooked in mainstream ESG measurement frameworks. By integrating digital, human and infrastructural dimensions into a single readiness index, the DSRI fills a methodological gap and supports the operationalization of double materiality in performance assessment. Unlike most prior studies, which focus on compliance or communication practices, this research links internal capability structures with measurable economic outcomes, offering new insights into how digital and sustainable strategies interact within organizational ecosystems.
