<p>Entrepreneurial firms are heavily relying on digitalization to enhance environmental, social, and governance (ESG) performance and sustainability performance (SP) these days. This study investigates the effect of digital capabilities (DC) on sustainability performance of Chinese manufacturing firms. In addition, the study investigates the mediating impacts of data-driven decision-making, (Environmental, social, and governance) ESG performance, and innovation performance between DC and SP. Moreover, the study examines the moderating role of entrepreneurial orientation (EO). Data were gathered from 395 managers/owners of SMEs in China, employing PLS-SEM to explore the multiple mediation effect of data-driven decision-making, ESG performance, and innovation performance between DC and SP. The results revealed a positive relationship between digital capabilities and SP. Thus, data-driven decision-making plays a mediating role in DC and SP. The study further showed that ESG performance has a mediating role between DC and SP, whereas innovation performance has a mediating role between DC and SP. Moreover, EO significantly moderated between DC, data-driven decision-making, and SP. This study shows that digital capabilities, data-driven decision-making, and innovation boost sustainability performance. It highlights the role of entrepreneurial orientation in enhancing ESG outcomes. Firms can leverage these insights to improve sustainability strategies<b>.</b> This study offers new empirical insights by examining the various mediating roles of digital capabilities, ESG performance, and innovation performance in the relationship between DC and sustainability performance through the theoretical lens of resource orchestration theory.</p>