Digital Transformation as a Driver of Sustainability Performance—A Study from Freight and Logistics Industry

Abstract

Over the past two decades, environmental sustainability has become a key corporate and organisational issue. Today, firms are increasingly turning to existing and emerging digital technologies to help ensure that they meet the medium and long-term needs and expectations of customers and other stakeholders with respect to sustainability performance. This raises the important question of which digitisation factors most significantly impact environmental sustainability performance, as well as the mediating factor of sustainability innovation balance (the ability of a firm to balance the exploration of new innovations with the exploitation of existing innovations). A comprehensive survey instrument was developed and refined through expert feedback and a pilot study, leading to data collection from 374 professionals in the Freight and Logistics industry in Saudi Arabia, all of whom held senior positions in areas such as business development, IT, and Environmental, Social, and Governance (ESG) departments. This data was then analysed using structural equation modelling (SEM). The results of this analysis showed that the key factors impacting sustainability performance were digital competence, strategy alignment, digital adaptability, innovation exploitation and innovation exploration. These findings contribute to the current literature by expanding our understanding of the real-world drivers of sustainability performance. In practical terms, the study will help managers improve sustainability performance by enhancing resource efficiency, streamlining, and supply chain management, as well as improving employee engagement and training, fostering a culture of sustainability within the organisation.