A Systematic Review of Eco-Innovation and Performance from the Resource-Based and Stakeholder Perspectives

Abstract

The growing concerns surrounding the precarious state of the biosphere have triggered organizations to develop and implement innovations that curb environmental degradation (eco-innovation). However, eco-innovation is a risky proposition for organizations and their stakeholders, due to uncertainty of outcome. Despite the high investment risk of eco-innovation, the literature that assesses eco-innovation outcomes from an organizational performance perspective is scant. Thus, this paper uses a systematic approach to review eco-innovation and performance literature. The eco-innovation and performance literature reviewed in this paper is sourced from the Scopus and Web of Science (WoS) scientific databases. Results from this systematic review suggest that the capital market stakeholder group—an essential stakeholder group—has received little attention in the eco-innovation and performance literature. This is alarming, as this stakeholder group is expected to act in the best interests of the organization—as well as the other stakeholders—especially during strategy formulation and implementation. This paper also finds that the resource-based view and stakeholder theory are frequently utilized in explaining eco-innovation. However, the natural resource-based view is least utilized, despite growing environmental pressures. A multi-theoretical perspective can help to overcome the limitations of one theory, as well as help to unearth additional organizational factors which could potentially catalyze the eco-innovation and performance relationship.

Effects of Eco-Innovation on Economic and Environmental Performance: Evidence from Turkey’s Manufacturing Companies

“…Along with pollution prevention and product stewardship capabilities, businesses should work on introducing cleaner production methods. Developing or using cleaner production technologies requires companies to have eco-innovation capability [9].…”

Mapping the Field of Eco-Innovation Strategies: A Review

“…Therefore, the issues related to water and/ or air pollution and enormous quantities of waste have been observed in the scientific literature (Tamayo-Orbegozo et al, 2017). The changes of environmental regulations and growth of the consumers' awareness of environmental change (Munodawafa & Johl, 2019) had forced the firms to adapt and take a different perspective on environmental innovations, such as: "energy-saving, pollution-prevention, waste recycling, green product designs and corporate environmental management" (Chen et al, 2012).…”

“…Therefore, the development of environment-friendly products is one of the most significant course in current environmental management (Luiz et al, 2016). The environmental innovations consolidate sustainable development by diminishing of non-renewable resource dependence, waste and hazardous materials production, as well as materials and energy consumption (Munodawafa & Johl, 2019). Notably, eco-innovation differ from other types of innovations and emphasizes the environmental aspect which makes it an ideal stimulant to the transformation to a circular economy, thus stimulating economic development without inducing irreversible damage to the natural environment (Munodawafa & Johl, 2019).…”

“…The environmental innovations consolidate sustainable development by diminishing of non-renewable resource dependence, waste and hazardous materials production, as well as materials and energy consumption (Munodawafa & Johl, 2019). Notably, eco-innovation differ from other types of innovations and emphasizes the environmental aspect which makes it an ideal stimulant to the transformation to a circular economy, thus stimulating economic development without inducing irreversible damage to the natural environment (Munodawafa & Johl, 2019). Hence, the development of eco-innovations might be a solution for the firms that encounter a discrepancy between economic development and environmental protection (Chen et al, 2012).…”

Innovation Ecosystems: A Sustainability Perspective

“…Munodawafa and Johl, based on results achieved from a systematic literature review of eco-innovation, suggest that organizational stakeholders, resources, and capabilities are critical factors in the definition of an innovation strategy. Furthermore, the authors conclude that resource-based and stakeholder theories are frequently utilized to explain eco-innovation processes [6].…”