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While existing literature acknowledges the development of digital capabilities as essential for enterprises to achieve digital transformation, it falls short in offering comprehensive theoretical insights into the dynamic evolution of these capabilities, especially in the field of environmental and sustainability issues. This paper addresses this gap by employing an exploratory single-case study methodology to investigate the intricate process through which an ecological restoration enterprise in China updates its digital strategy, facilitating the dynamic evolution of its digital capabilities from a resource orchestration theory perspective. Our findings reveal a sequential evolution from digital strategy renewal to resource orchestration and, ultimately, the advancement of digital capabilities. Specifically, the enterprise engages in a co-adjustment and co-creation process, aligning its resources with a digital strategy refresh and fostering the emergence of digital integration and innovation capabilities through effective resource management. This includes the accumulation and divesting of resources as part of the construction process, alongside the enrichment and bundling of resources. This research bridges the gap in the current literature by providing a nuanced understanding of the mechanisms that drive the evolution of digital capabilities, and it offers a theoretical framework that integrates strategic renewal with resource orchestration for environmental and socio-economic sustainable development. Furthermore, the insights gained provide vital managerial implications for the governance, corporate social responsibility and policy of industrial digitalization towards global environmental practice and sustainable development goals (SDGs). [ABSTRACT FROM AUTHOR]