Driving Toward Sustainable Development Goals (SDGs) in the Ready-Made Garments (RMGs) Sector: The Role of Digital Capabilities and Operational Transparency

In today’s digital transformation era, the importance of developing dynamic capabilities has significantly increased. However, the literature has not fully explored the significance of dynamic capabilities in sustainable development. Hence, this study examines the impact of digital capabilities (DC) and operational transparency (OT) on achieving sustainable development goals (SDGs). Drawing upon the dynamic capability view (DCV), we analysed the impact of DC on decent work conditions (DWC), reduced inequalities (RI), responsible consumption and production (RCP), and reduced carbon footprint (RCF) through the mediating effect of OT. We conducted fourteen semi-structured interviews to understand how developing dynamic capabilities can drive organisations toward achieving SDGs. Subsequently, we applied a cross-sectional survey to gather data from 257 respondents in the Bangladeshi ready-made garments (RMG) industry. We used the variance-based structural equation modelling (PLS-SEM) technique to test our research hypotheses. Our findings suggest that DC significantly enhances OT and that OT can positively impact DWC, RI, RCP, and RCF. Additionally, we found that OT partially mediates the link between DC and SDGs. Our study provides valuable insights into the DCV, offering a better theoretical understanding of the role of DC in enhancing OT to achieve SDGs. It can also encourage firms to take advantage of emerging digital technologies and the trend toward digitalisation by demonstrating a strong commitment to adopting new advanced technologies, developing dynamic capabilities, and striving to achieve SDGs.