Greening the supply chain: How digital transformation shapes environmental sustainability in emerging economies

Rapid supply chain digitalization improves production efficiency in emerging economies, but also intensifies the environmental pressures. This study examines the impact of supply chain digitalization on the ecological footprint in the E-7 economies (China, India, Brazil, Mexico, Russia, Indonesia, and Türkiye) over the period 1994–2023. Employing second-generation panel estimators, specifically, the cross-sectionally augmented autoregressive distributed lag and augmented mean group approaches to account for cross-sectional dependence and slope heterogeneity in the data. The results show that supply chain digitalization and natural resource use significantly increase the ecological footprint, whereas the green energy transition and technological innovation mitigate this effect. Furthermore, the environmental consequences of digitalization are conditional on parallel investments in clean energy systems and innovation capacity. The findings contribute to the energy-environment literature by clarifying the circumstances under which digital transformation influences environmental sustainability in emerging economies. • Supply chain digitalization and natural resources increase ecological footprints in E-7. • Green energy transition and technological innovation mitigate environmental degradation. • Advanced CS-ARDL/AMG methods address cross-sectional dependence in panel data. • Policy frameworks are balancing digital growth and sustainability in emerging economies.