Digital maturity and corporate sustainability: Evaluating efficiency dynamics in an emerging market context

• A U-shaped link is found between digital maturity and sustainability efficiency. • Low digital maturity lowers efficiency due to high costs and internal adaptation issues. • High digital maturity improves ESG performance and corporate sustainability efficiency. • Firm size and financial risk negatively influence sustainability efficiency. • The study uses DEA and panel data to analyze firms in an emerging market context. This study examines the impact of digital maturity (DM) on corporate sustainability efficiency (CSE) among companies listed on Borsa Istanbul in Turkey. Using panel data (2018–2022) from 30 non-financial firms, we construct a corporate digitalization index (CDI) as a proxy for DM through text mining analysis of digital-related terms in annual reports. CSE is evaluated via data envelopment analysis (DEA), utilizing environmental, social, and governance (ESG) scores of sustainability as inputs and profitability ratios as outputs. Panel regression analysis reveals a U-shaped curvilinear relationship, indicating that firms initially experience reduced efficiency due to high investment costs and adaptation challenges but subsequently achieve increased efficiency as they realize operational and strategic gains from advanced DM. These findings highlight the nonlinear dynamics of digital capability development, offering practical implications for firms aiming to optimize their sustainability strategies through effective digital transformation.