<p>Against the background of parallel progress in digital development and the pursuit of the “dual carbon” goals, it is crucial for firms to achieve green and low-carbon transformation through digital transformation. Using a panel dataset of Chinese listed firms over the period 2011–2023, this paper takes corporate ESG ratings as a proxy for green and low-carbon transformation, and empirically examines the impact of corporate digitalization on green and low-carbon transformation using a high-dimensional fixed effects model. The results show that corporate digitalization significantly promotes green and low-carbon transformation, and this effect stems from the combined impact of “soft” factors—such as strategic leadership enhanced by digital transformation—and “hard” factors, including digital outputs and technologies. With regard to the underlying mechanisms, corporate digitalization facilitates green and low-carbon transformation mainly by improving production efficiency and innovation capacity, as well as by enhancing the matching between production and sales, and the connectivity of production systems. The heterogeneity analysis reveals that digitalization drives green and low-carbon transformation particularly among firms located in the eastern and central regions, firms in cities with relatively weak information technology capacity, low-tech firms, digital manufacturing firms, and state-owned enterprises. Furthermore, extended analysis shows that digital transformation not only accelerates green and low-carbon transformation but also reduces the divergence in corporate ESG performance. These findings suggest that firms should leverage the interaction between the “soft power” and “hard power” of digital transformation to support green and low-carbon development. Meanwhile, digital transformation should be promoted in a differentiated, sequential, and targeted manner across regions and firm types to strengthen the overall low-carbon transformation of enterprises.</p>