The Influence of an Organization’s Digital Orientation on its Environmental Performance

Abstract

In recent years, the severe effects of climate change have become an increasingly important issue within society and have brought company’s impact on the environment under public scrutiny. Thus, companies’ methods to improve their environmental performance have become a relevant topic in recent literature. Our study aims to extend current research and, based on the natural-resource-based view theory, examines the relationship between an organization’s strategic digital orientation and its environmental performance. Using a unique cross-industry panel of 515 S&P 500 companies from 2009 to 2019, we find support for the positive relationship between digital orientation and environmental performance. Furthermore, in line with contingency theory, we provide evidence that technological turbulence strengthens this relationship. Our study contributes to both strategic management and climate change literature by establishing the connection between digital orientation and environmental performance as well as its boundary condition. We extend existing knowledge concerning the recently introduced concept of digital orientation and offer valuable insights for practitioners seeking to leverage their digital orientation to better position their firm in the financial market.