Servitization and Industry 4.0 are the two most significant issues in a recent study on manufacturing strategy changes for economic and sustainable growth. Questions were raised on how Industry 4.0 and green practices improve green supply chain performance with the mediation role of green servitization? Green servitization now addresses product service systems and environmental impacts. This study is crucial because environmental unpredictability is causing the supply chain to migrate toward green and digital supply chains, which reduce environmental impact and increase efficiency. The institutional and resource-based view theory-based research model checks the moderation of Environmental, social and government (ESG) compliance and the mediation role of green servitization for environmental advantages. It helps to develop a research model. Structural equation modeling applies to check the model and hypotheses' significance. The unique research model with the three hypotheses is validated with less than two-tailed 0.001 significance, showing that Industry 4.0 and green practices positively affect green servitization and green supply chain (GSC) performance while moderating ESG compliance. This research also reveals that green servitization mediates and ESG compliance moderates the association between Industry 4.0, green practices, and GSC performance. Based on our unique results, managers should adopt green servitization to boost GSC performance.