DIGITAL TRANSFORMATION, STAKEHOLDER TRUST AND GREEN INNOVATION: A CONCEPTUAL REVIEW OF SUSTAINABLE BUSINESS PERFORMANC
Abstract
Digital transformation has become a key strategic tool for companies to make sustainability an integral part of everyday business. However, previous studies have largely examined digital capability, stakeholder trust, green innovation and sustainable performance in separate streams and have not explained how these constructs interact within one integrated framework. This review paper explores the interplay of digital transformation, stakeholder trust and green innovation/digital-green capability in shaping sustainable business performance. A structured narrative review inspired by thematic synthesis was conducted using EBSCOhost, ScienceDirect, Emerald Insight, SpringerLink, SAGE Journals and Wiley Online Library. The review protocol covered database searching and study selection, thematic coding and conceptual synthesis, resulting in 22 peer-reviewed studies, mostly published between 2019 and 2026. The paper reveals five core themes: digital transformation and sustainability alignment; stakeholder trust as relational capital; green innovation as a sustainability mechanism; digital-green capability as a composite organisational resource; and sustainable business performance as a multi-dimensional outcome. The originality of this review lies in integrating these previously fragmented streams within one capability-relational framework. Stakeholder trust is proposed as the moderating construct and digital-green capability as the central integration construct through which digital investment creates sustainability value. The framework also recognises green innovation as the enabler by which digital-green capability is translated into sustainable business performance. Four theoretical propositions are presented for further empirical research. The review advances scholarship beyond operational efficiency towards relational and environmental value creation. It also provides practical guidance for managers, sustainability officers, entrepreneurs and policymakers seeking to make credible and measurable sustainability commitments alongside digital investment.