Digital Transformation on Green Operational Performance: Evidence From the E‐Waste Firm's Perspective

ABSTRACT Digital transformation (DT) is increasingly recognised as essential for improving environmental performance in process‐intensive and hazardous sectors; however, the mechanisms by which digitalisation translates into green operational performance (GOP) and environmental accountability remain insufficiently investigated, particularly in developing‐economy e‐waste contexts. Drawing on the Resource‐Based View (RBV) theory, this study examines how digital resources (DR) and digital leadership (DL) influence GOP and conceptualises DT as the strategic and governance‐oriented capability that converts digital endowments into GOP. Using survey data from 279 employees across licensed and unlicensed e‐waste firms in Sri Lanka, we employ covariance‐based structural equation modelling (CB‐SEM) and Random Forest (RF) analysis to assess complex associations and predictive significance. The results show that DT is the primary mechanism through which digitalisation yields GOP. RF diagnostics validate these results, identifying DT as the strongest predictor of GOP, followed by DR, whereas DL contributes to GOP only indirectly through DT, underscoring leadership's role in shaping governance structures and institutionalised routines rather than directly influencing GOP. The study contributes to RBV by conceptualising DT as a conversion capability that translates DR and DL intent into environmentally accountable operational practices, thereby extending RBV to incorporate normative and sustainability governance considerations of e‐waste firms. It offers one of the first empirical examinations of digital–environmental linkages in Sri Lanka's e‐waste sector, providing actionable insights for managers and policymakers seeking to align digitalisation with environmental performance objectives.