The strategic implementation of digital technologies is a crucial factor for lowering costs and enhancing operational efficiency in organizations, optimizing production processes and promoting sustainable development. In this context, comprehending the precise influence of digital transformation on firms' environmental, social, and governance (ESG) outcomes is crucial for advancing sustainable development in China's economy and society. This research examined energy firms in four nations (Iraq, Bahrain, the UAE, and Saudi Arabia) and specifically investigated how digital transformation influences ESG performance enhancement. The findings indicated that digital transformation greatly enhances ESG performance, especially in non-state-owned enterprises (SOEs) in contrast to SOEs. In particular, digital transformation efforts enhance ESG performance by boosting the number of highly skilled employees and enhancing the skills of the current workforce. Additionally, environmental regulations diminish the beneficial effects of digital transformation on both the number and proficiency of a company's workforce, subsequently influencing their ESG performance at the organizational level. A questionnaire was designed for data collection based on previous studies. A random sample of employees in energy companies in four countries (Iraq, UAE, Bahrain, and Saudi Arabia) was selected. The questionnaire was distributed using Google Forms, and the sample size was )774( valid questionnaires. The data were analyzed using SPSS and Amos software. The results showed a strong relationship between green digital transformation and environmental, social, and governance (ESG) performance.