In light of rising pressure from investors to be transparent in ESG disclosures, alongside increasing demand for ESG information driven by accelerating digital transformation and its impact on firms’ ability to access market-based funding, this research investigates how financial digital transformation capability influences market-based financing advantage, using ESG disclosure quality as a mediator. Using a cross-sectional survey of 543 Moroccan companies and Partial Least Squares Structural Equation Modeling (PLS-SEM), we find a positive relationship between financial digital transformation capability and ESG disclosure quality (β = 0.506, p < .01), as well as a significant positive relationship between ESG disclosure quality and market-based financing advantage (β = 0.468, p < .01). In addition, mediation analysis shows that ESG disclosure quality mediates the relationship between financial digital transformation capability and market-based financing advantage (β = 0.237, p < .01). This study provides additional insight into the literature on digital capabilities and market-based financing in emerging markets by demonstrating the role of high-quality ESG disclosures as an intangible mechanism linking digital capabilities to financing advantages. Furthermore, practical implications are highlighted to support firms in aligning digital strategies with ESG reporting practices in order to improve access to capital markets.