<p>The Next Generation EU (NGEU) program was aimed at a resilient recovery by building on the European Green Deal after COVID-19 had exacerbated the social crisis in Europe., This paper explores whether these policies have broadened the scope and have accelerated the twin transition (green and digital) in Italy, whose national recovery and resilience plan (NRRP), received the largest share of the NGEU’s funding. Specifically, we investigate whether NRRP measures are increasing the innovation of business models in an entrepreneurial landscape dominated by family firms that often have fragile organizational structures. Using micro-data regarding almost 3000 Italian firms, our findings suggest that the NRRP is effectively helping to tackle the twin transition challenge. We show that when firms initiate NRRP projects: (i) non-twin-transition firms are more likely to start the twin transition (<i>extensive margin</i>); (ii) twin-transition firms are more likely to continue investing in the twin transition (<i>intensive margin</i>); (iii) there is an expansion in the twin transition particularly in disadvantaged entrepreneurial segments/areas (<i>inclusive margin</i>); (iv) the twin transition improves firm-level performance (<i>innovation margin</i>).</p>