["Business Strategy and the Environment, Volume 35, Issue 4, Page 5577-5597, May 2026. ", "\nABSTRACT\nThe supply chain consists of interconnected businesses and organisations responsible for the flow of goods and services. As firms increasingly adopt digital technologies, the spillover effects of supply chain digitalisation (SCD) on environmental performance remain underexplored. This study examines how the digitalisation of suppliers and customers influences pollution emissions in midstream manufacturing firms. Using data from Chinese A‐share‐listed firms and social network analysis, we construct a novel indicator to measure SCD. Our findings reveal that digitalisation within the supply chain significantly reduces pollution emissions through three key mechanisms: cost efficiency, improved resource allocation and green technology innovation. The effect is more pronounced in high‐pollution industries, regions with stricter environmental regulations and regions with well‐developed digital infrastructure. These insights highlight the strategic role of digital transformation in driving corporate sustainability and provide valuable implications for firms and policymakers navigating green business strategies.\n"]