Leveraging digital capabilities for ESG performance: The mediating roles of innovativeness and resilience in the UK healthcare sector

Abstract

This study examines the extent to which digital business capabilities (DBCs) influence B2B firms' environmental, social, and governance (ESG) performance, and explores the mediating roles of business model innovativeness (BMI) and organisational resilience (OR) in this relationship. In addition, it investigates the moderating effects of absorptive capacity (AC) and market dynamism (MD), offering insights into how internal and external conditions shape the DBC–ESG performance linkage. Drawing on empirical data from managers in the UK healthcare sector, the study finds that while DBCs may not directly impact ESG outcomes, they play a crucial enabling role by positively influencing internal capabilities such as innovativeness and resilience. The direct DBC–ESG link is not significant in the pooled sample, but does emerge in the B2B healthcare context, while the most consistent pathway is the indirect effect through resilience. Furthermore, firms with higher levels of AC are better positioned to leverage digital capabilities for innovation. However, the positive effect of resilience on ESG performance is weakened under conditions of high MD. This study contributes to the literature on the drivers of ESG performance by elucidating how firms can manage ESG practices through the interplay of digital capabilities, innovation, and resilience.