DIGITAL TRANSFORMATION AND GREEN FINANCE ADOPTION: MEDIATING ROLE OF CSR AND MODERATED BY PROJECT MANAGEMENT MATURITY

Abstract

The transition toward environmentally sustainable financial systems has become a strategic imperative for organizations, particularly in emerging economies where climate vulnerabilities are high and institutional support is limited. This study examines how digital transformation drives green finance adoption among Small and Medium Enterprises (SMEs) in Pakistan, emphasizing the mediating role of Corporate Social Responsibility (CSR) and the moderating influence of Project Management Maturity (PMM). Guided by the Dynamic Capabilities Theory (DCT), the research posits that green finance adoption is not merely a technological outcome but a dynamic capability shaped by ethical commitment and organizational execution capacity. Adopting a quantitative, cross-sectional design, data were collected from 375 SME managers through structured questionnaires. Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 4 was employed to test the hypotheses. The results revealed a significant positive effect of digital transformation on green finance adoption, affirming the role of digital technologies in enhancing sustainability practices. CSR was found to mediate this relationship, illustrating that ethical and social responsibility practices are essential in translating digital capacities into green finance behaviors. PMM demonstrated a significant negative moderating effect, indicating that high levels of formalized project structures may limit the agility needed for effective green finance implementation. The study extends theoretical discourse by integrating digital, ethical, and managerial dimensions into a unified framework for understanding green finance behavior.

Keywords: Digital Transformation, Green Finance Adoption, Corporate Social Responsibility, Project Management Maturity, Dynamic Capability Theory