As the world moves across digitalization and globalization, the requirements for supply chains to become more resilient, agile, and flexible are increasing. The transition to a low-carbon economy is required across all sectors to achieve sustainable business performance and maintain competitiveness in a challenging global market. This study examines the role of green innovation, organizational learning, and institutional pressure on supply chain flexibility in the Indian petroleum refinery sector through a comprehensive case study. Using organizational learning theory and institutional theory in the context of situation-actor-process, a learning-action-performance framework, and effective-interpretive ranking process, the study systematically examines supply chain flexibility within a case organization. The analysis draws upon detailed information gathered from primary and secondary sources. New ideas and strategies are proposed to promote decarbonizing, waste-water treatment, supply chain flexibility, and sustainable business performance. The e-IRP unveils several noteworthy outcomes. Firstly, actors’ top management commitment, research institutions, and government rules and regulations play crucial roles in driving green innovations across supply chain operations, leading to flexibility and sustainable business performance. Incorporation of digital technologies, collaboration and cooperation among various stakeholders, with a focus on research and development activities are important actions needed for smoother energy transition and system performance in the PRS. Practitioners and policymakers can leverage these findings to enhance supply chain flexibility and sustainable business performance through appropriate environmental impact assessments, technological development, and transparent operational monitoring to effectively manage supply–demand disruptions and price volatility in the petroleum refinery sector.