In the new development stage, enterprises face the dual challenges of economic benefits and environmental protection. Establishing a sustainable development mechanism to enhance green production efficiency is particularly important. The development of the digital economy is accelerating the transformation of market environmental systems and the boundaries of corporate competition, reshaping the capability systems and value logic of enterprises, and influencing their production decision-making. In this context, this paper studies how digital transformation affects enterprises’ decisions to upgrade environmental strategies, as well as the comprehensive impact of these decisions on economic efficiency and environmental performance in the context of digital transformation. Based on the data of China’s listed manufacturing companies from 2013 to 2022, this paper uses the Heckman two-stage model to correct the sample selection bias and studies the decision-making and behavior of enterprises regarding environmental strategic upgrading and its impact on their green total factor productivity against the background of digital transformation. The results are as follows. Firstly, digital transformation can promote enterprises to upgrade their environmental strategies, and under the empowerment of digital transformation, environmental strategy upgrading can effectively improve the green total factor productivity of enterprises. This conclusion still holds after a series of robustness tests. Secondly, the heterogeneity analysis reveals that although green finance pilot policies weaken the facilitative effect of digital transformation on the upgrading of corporate environmental strategies, they amplify the enhancing effect of environmental strategy upgrading on the green total factor productivity of enterprises. Thirdly, in terms of the promoting effect of digital transformation on environmental strategic upgrading, there is no significant difference between heavily polluting manufacturing enterprises and non-heavily polluting manufacturing enterprises, but compared with heavily polluting manufacturing enterprises, the effect of environmental strategy upgrading on corporate green total factor productivity is more obvious in non-heavy polluting manufacturing enterprises. This paper makes three contributions to pertinent literature. Firstly, this paper is the first to integrate digital transformation, environmental strategy upgrade, and green total factor productivity into the same research framework. In the theoretical dimension, the paper discusses the impact of digital transformation on corporate environmental strategic upgrading decisions at the two levels of cost and revenue and analyzes the mechanism of the value effect of corporate environmental strategic upgrading in the context of the digital economy. Secondly, in the methodological dimension, the above variables are put into the framework of Heckman two-stage model for regression, which effectively alleviates the endogeneity problem caused by the self-selection behavior of environmental strategic upgrading. Also, the corresponding regression results have stronger robustness. Thirdly, the heterogeneity test based on the external financial environment of enterprises shows that in the green finance reform and innovation pilot zone, the environmental strategy upgrade has a significantly greater effect on the improvement of the green total factor productivity of enterprises. This finding opens up new space for analyzing the interactive relationship between green finance and corporate environmental management. This paper not only provides theoretical contributions and empirical evidence for the research on the motivations and value effects of corporate environmental strategy selection, but also provides a scientific basis for digital transformation practice under the guidance of environmental strategy upgrading.