Digital Empowerment and Risk Management: Dual-Path Mechanisms and Boundary Conditions for the Sustainable Transformation of the Construction Industry

The construction industry, a global economic pillar and carbon emission giant, faces a critical gap between digital transformation and risk management, which ultimately undermines the sector’s capacity for risk management. This study combines social technical systems theory with the technology–organization–environment framework, using panel data from Chinese listed construction firms to explore how digital transformation affects project risk management. Key findings reveal that digital transformation significantly boosts risk management through two distinct pathways. While environmental governance capacity and green innovation efficiency both serve as significant mediators, the study identifies a notable disparity in the driving forces: digital transformation exerts a stronger impact on green innovation efficiency (17.8%) compared to environmental governance (4.4%). However, the resulting mediating effects of these two paths are found to be remarkably similar (0.0060 vs. 0.0068). Furthermore, labor investment efficiency is identified as a critical boundary condition, with a threshold effect (−0.385) below which the benefits of digital transformation weaken. These findings provide empirical evidence from Chinese context regarding the “technology-institution” co-evolution mechanism in construction. While centered on China, the study offers valuable insights for global stakeholders on how to harness digitalization to mitigate project risks and enhance sustainability.