Digital Governance Readiness and Consumer-Oriented Green Innovation: Evidence from European Listed Firms

Digitalization may be associated with environmental innovation, but this relationship can depend on governance mechanisms that protect data and support trustworthy information use. This study examines Digital Governance Readiness (DGR)—a formative composite of standardized data-privacy and cybersecurity indicators—and a Consumer-Oriented Green Innovation (COGI) Index combining Environmental Innovation, Product Responsibility, and alignment with SDGs 9 and 12. Using LSEG Refinitiv Eikon data for an unbalanced panel of 225 European listed industrial firms (1833 firm-year observations over ten fiscal years), the preferred firm- and year-fixed-effects model reports a positive DGR–COGI association (β = 0.195, p < 0.01). Based on the reported sample standard deviations, a one-standard-deviation increase in DGR corresponds to approximately 0.244 standard deviations of COGI. The association remains positive in the reported lagged, PCA-based, winsorized sensitivity specifications. Because the design is observational, time-varying firm-level controls are not included, and the historical missing-component rule for the archived composites cannot be reconstructed from the available analytical record, the results are interpreted as conditional descriptive associations rather than causal or independently identified effects. The findings are consistent with privacy and cybersecurity governance being organizational capabilities linked to broader environmental and consumer-facing sustainability outcomes, but they do not isolate an explanatory effect of digital governance.