Roberto Chávez, Mohsin Malik, Amir Andargoli
ABSTRACT Environmental sustainability has become a critical global concern, prompting firms to explore digital solutions. Despite the recognized potential of digital technologies to mitigate environmental impact, organizations continue to face challenges in achieving the intended outcomes. This study draws on resource orchestration theory (ROT) to investigate the role of digital leadership capability (DLC) in enhancing environmental performance, with particular focus on the mediating roles of digital technology alignment (DTA) and digital innovation. Using survey data from 183 healthcare organizations engaged in digital transformation initiatives, our findings provide empirical support for the proposed model. The results indicate that DLC positively influences environmental performance through both direct and indirect pathways, reinforcing the importance of leadership in digital sustainability initiatives. Additionally, DTA serves as a critical enabler, facilitating the effective integration of digital technologies with existing organizational resources, while digital innovation acts as a key mechanism for translating leadership‐driven digital initiatives into tangible environmental benefits. A serial mediation effect is observed, demonstrating that the combined impact of DTA and digital innovation significantly enhances the environmental performance outcomes associated with DLC.