Systematic Review - Network for Business Sustainability

We began our review with articles from the early
1990s, 3 when Sustainability-Oriented Innovation
(SOI) was thought of principally in terms of firms’
environmental impacts and their technological
solutions. Solutions were then regarded by many
managers as an additional cost to the firm. The
dominant strategic orientation was reactive;
implementing environmentally related innovations was
seen as a necessary response to regulatory obligations.
The traditional argument that polluting firms are
competitively disadvantaged by the obligation to
reduce their emissions has been countered by Porter
and Van Der Linde (1995) among others. They argued
that firms can benefit from first-mover advantages,
economic efficiencies and reputational enhancement.
That is, adoption of an environmental orientation can
contribute to, not detract from, a firm’s competitive
advantage.
Twenty years later, the tenor of the literature reflects
an evolved perspective: many firms are increasingly
proactive, innovating in the domain of sustainability for
reasons of both compliance and competitiveness. They
are also motivated by a wider systems/common futures
perspective that adopts more responsible positions in
terms of the social and environmental impacts of their
business activity.
Contemporary firms are experimenting with novel
practices that extend the idea of sustainable business
beyond eco-efficiency to fully integrate sustainability
thinking as a core business driver and into all aspects
3 Our review focuses on the period from from 1992 (marked by the Rio Summit) to 2012.
of their operations and relationships. Firms are forming
new collaborations, embedding themselves in local
and global communities and experimenting with new
business models and with new models of innovation,
such as frugal innovation, resource-constrained
innovation, reverse innovation and jugaad innovation.
SOI AND TRADITIONAL INNOVATION
Our findings suggest that SOI and traditional innovation
have much in common. Both address technological
change and innovations in processes, in operating
procedures and practices, in business models and in
systems thinking. Because of these commonalities,
firms with existing innovation capability are well
positioned to become sustainably-oriented innovators.
Their already-developed innovation capability is an
important antecedent of their capability for SOI.
Similarly, firms should be able to easily integrate
sustainability dimensions into any already adopted
quality systems such as Six Sigma or ISO 9000.
In the context of Operational Optimization, the first
and typically incremental SOI stage, innovation for
SOI may not be a radically different phenomenon
from a firm’s previous innovation activities. Many
sustainable innovations, particularly those related to the
environment, are not radical — they reinvent the wheel.
They do what existing technologies already do, but in a
more ecologically efficient manner. Further, the values
that underpin conventional innovation also underpin
SOI in this context: added value or cost reduction
and, ultimately, either increased revenues from existing
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