Environmental sustainability has become a strategic priority for small and medium-sized enterprises (SMEs), requiring firms to develop innovation capabilities that support resource efficiency and environment-oriented business practices. This study investigates how social capital contributes to environment-oriented business model innovation through the mediating role of organizational learning capability by integrating the resource-based view, the knowledge-based view, and social capital theory. Survey data were collected from 312 Vietnamese SMEs and analysed using partial least squares structural equation modelling (PLS-SEM). The structural results showed that social capital strongly and significantly enhanced organizational learning capability (β = 0.732, p < 0.001), and organizational learning capability significantly enhanced business model innovation (β = 0.620, p < 0.001). The direct effect of social capital on business model innovation was non-significant (β = 0.087, p > 0.05), whereas the indirect effect through organizational learning capability was significant (β = 0.454, 95% CI [0.367, 0.548]), indicating full mediation. The model explained 53.6% of the variance in organizational learning capability and 47.1% in business model innovation. This study contributes to environmental sustainability research by explaining how SMEs transform network-based knowledge into sustainable business model innovation and provides practical implications for strengthening environmentally sustainable business development in emerging economies.
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