Harnessing supply chain digital innovation for enhanced corporate environmental practices and sustainable growth

Seeking to implement the sustainable development goals (SDGs), the integration of digital technologies in supply chains emerges as a promising tool to address environmental challenges and improve operational efficiency. Utilizing the supply chain innovation and application pilot policy as a quasi-natural experiment, we assess the causal impact of supply chain digitization on corporate environmental practices. Our findings reveal that supply chain digital innovation substantially enhances corporate environmental practices. We discuss four underlying economic mechanisms behind this causality: efficiency, governance, resource allocation, and innovation improvements. Furthermore, the impact is more pronounced for industries with high transportation costs, as well as for non-high-tech sectors and non-state-owned enterprises. When companies face weaker environmental regulations, this effect is further amplified. Moreover, we examine the spillover effects of supply chain digital innovation on the environmental practices of upstream and downstream enterprises. The results suggest that supply chain digital innovation could trigger desirable economic consequences by exerting positive impacts on sales volume and market value. These findings offer practical implications for policymakers to leverage smart and digital supply chain systems in attaining SDGs.