Globally, businesses are required to develop capabilities that enable them to respond to sustainability demands. In the current context of the digitally evolving entrepreneurship scenario, the study investigates the role of digital capabilities (DCs) for the green entrepreneurship (GE) potential of small and medium enterprises (SMEs) while considering the underlying effects of an organization’s strategic agility (SA). The study’s data came from a survey of 136 SMEs in Saudi Arabia, where digitalization and sustainable development – are positioned as twin transitions for transforming the SME sector. The data analysis results from partial least square structural equation modelling (SmartPLS 3.0) revealed that DCs have no direct impact on the GE potential of SMEs. However, the findings support SA as both directly influencing the GE and positively moderating the DCs-GE relationship in SMEs. As a result, the study produces new theoretical and practical implications underpinning digitization and GE in the contemporary sustainability context.
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