Keywords:
environmental innovation
natural-resource based-view
business sustainability

  • Abstract

    Innovation, particularly environmental innovation, is essential for long-term company success. This study presents a systematic review of the relationship between eco-innovation and sustainable performance, focusing on the influences of country of origin, industry type, and company size. A comprehensive selection process reduced an initial pool of studies to 55 relevant papers. Some studies examined the direct relationship between eco-innovation and overall sustainable performance, finding primarily significant and positive outcomes. Specific dimensions of eco-innovation, such as eco-product, eco-process, and eco-marketing innovations, positively impact various aspects of sustainable performance. However, some studies noted non-significant relationships, indicating that environmental innovation does not always affect environmental, financial, or social performance. Several studies also incorporated moderators and mediators to understand these relationships better. Most of the research was conducted within the manufacturing sector in developing countries and included companies ranging from micro-enterprises to large corporations. The findings suggest that eco-innovation enhances sustainable performance; however, the impact varies significantly depending on the context. Notably, there are substantial gaps in the literature concerning the service industry and the differential effects on small and medium-sized enterprises (SMEs) compared to larger firms. This indicates a need for future research to delve into eco-innovation within the service sector, the challenges SMEs face in adopting eco-innovations, and the contextual factors affecting the relationship between eco-innovation and sustainable performance. Moreover, the current body of research is skewed towards developing countries, suggesting an imbalance that future studies should address by including more data from developed nations. Such an approach would provide a more comprehensive global perspective on the relationship between eco-innovation and sustainable performance. While eco-innovation generally benefits sustainable performance, its varying impact across different industries, company sizes, and countries highlights the necessity for diversified research in this field.

  • References

    1. Abdullah, M., Zailani, S., Iranmanesh, M., & Jayaraman, K. (2016). Barriers to green innovation initiatives among manufacturers: the Malaysian case. Review of Managerial Science, 10(4), 683–709. https://doi.org/10.1007/s11846-015-0173-9
    2. Acciaro, M., Vanelslander, T., Sys, C., Ferrari, C., Roumboutsos, A., Giuliano, G., Lam, J. S. L., & Kapros, S. (2014). Environmental sustainability in seaports: a framework for successful innovation. Maritime Policy and Management, 41(5), 480–500. https://doi.org/10.1080/03088839.2014.932926
    3. Adams, R., Jeanrenaud, S., Bessant, J., Denyer, D., & Overy, P. (2016). Sustainability-oriented Innovation: A Systematic Review. International Journal of Management Reviews, 18(2), 180–205. https://doi.org/10.1111/ijmr.12068
    4. Alos-Simo, L., Verdu-Jover, A. J., & Gomez-Gras, J. M. (2020). Does activity sector matter for the relationship between eco-innovation and performance? Implications for cleaner production. Journal of Cleaner Production, 263. https://doi.org/10.1016/j.jclepro.2020.121544
    5. Beltrán-Esteve, M., & Picazo-Tadeo, A. J. (2015). Assessing environmental performance trends in the transport industry: Eco-innovation or catching-up? Energy Economics, 51, 570–580. https://doi.org/10.1016/j.eneco.2015.08.018
    6. Bos-Brouwers, H. E. J. (2010). Corporate sustainability and innovation in SMEs: Evidence of themes and activities in practice. Business Strategy and the Environment, 19(7), 417–435. https://doi.org/10.1002/bse.652
    7. Ch’ng, P. C., Cheah, J., & Amran, A. (2021). Eco-innovation practices and sustainable business performance: The moderating effect of market turbulence in the Malaysian technology industry. Journal of Cleaner Production, 283, 124556. https://doi.org/10.1016/j.jclepro.2020.124556
    8. Chardine-Baumann, E., & Botta-Genoulaz, V. (2014). A framework for sustainable performance assessment of supply chain management practices. Computers and Industrial Engineering, 76(1), 138–147. https://doi.org/10.1016/j.cie.2014.07.029
    9. Cheng, C. C. J., Yang, C. L., & Sheu, C. (2014). The link between eco-innovation and business performance: A Taiwanese industry context. Journal of Cleaner Production, 64, 81–90. https://doi.org/10.1016/j.jclepro.2013.09.050
    10. Cheng, C. C., & Shiu, E. C. (2012). Validation of a proposed instrument for measuring eco-innovation: An implementation perspective. Technovation, 32(6), 329–344. https://doi.org/10.1016/j.technovation.2012.02.001
    11. Dogaru, L. (2020). Eco-innovation and the contribution of companies to the sustainable development. Procedia Manufacturing, 46(2019), 294–298. https://doi.org/10.1016/j.promfg.2020.03.043
    12. Dong, Y., Wang, X., Jin, J., Qiao, Y., & Shi, L. (2014). Effects of eco-innovation typology on its performance: Empirical evidence from Chinese enterprises. Journal of Engineering and Technology Management - JET-M, 34, 78–98. https://doi.org/10.1016/j.jengtecman.2013.11.001
    13. El-Kassar, A. N., & Singh, S. K. (2019). Green innovation and organizational performance: The influence of big data and the moderating role of management commitment and HR practices. Technological Forecasting and Social Change, 144(December), 483–498. https://doi.org/10.1016/j.techfore.2017.12.016
    14. Eltayeb, T. K., Zailani, S., & Ramayah, T. (2011). Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: Investigating the outcomes. Resources, Conservation and Recycling, 55(5), 495–506. https://doi.org/10.1016/j.resconrec.2010.09.003
    15. Farza, K., Ftiti, Z., Hlioui, Z., Louhichi, W., & Omri, A. (2021). Does it pay to go green? The environmental innovation effect on corporate financial performance. Journal of Environmental Management, 300(September). https://doi.org/10.1016/j.jenvman.2021.113695
    16. Fatoki, O. (2019). Sustainability-oriented innovation and performance of small and medium enterprises in south africa. Journal of Environmental Management and Tourism, 10(1), 231–243. https://doi.org/10.14505/jemt.v10.1(33).23
    17. Fernando, Y., Chiappetta Jabbour, C. J., & Wah, W. X. (2019). Pursuing green growth in technology firms through the connections between environmental innovation and sustainable business performance: Does service capability matter? Resources, Conservation and Recycling, 141(July 2018), 8–20. https://doi.org/10.1016/j.resconrec.2018.09.031
    18. Ganapathy, S. P., Natarajan, J., Gunasekaran, A., & Subramanian, N. (2014). Influence of eco-innovation on Indian manufacturing sector sustainable performance. International Journal of Sustainable Development and World Ecology, 21(3), 198–209. https://doi.org/10.1080/13504509.2014.907832
    19. Geng, D., Lai, K. hung, & Zhu, Q. (2021). Eco-innovation and its role for performance improvement among Chinese small and medium-sized manufacturing enterprises. International Journal of Production Economics, 231, 107869. https://doi.org/10.1016/j.ijpe.2020.107869
    20. Ghisetti, C., & Rennings, K. (2014). Environmental innovations and profitability: How does it pay to be green? An empirical analysis on the German innovation survey. Journal of Cleaner Production, 75, 106–117. https://doi.org/10.1016/j.jclepro.2014.03.097
    21. Gong, M., Simpson, A., Koh, L., & Tan, K. H. (2018). Inside out: The interrelationships of sustainable performance metrics and its effect on business decision making: Theory and practice. Resources, Conservation and Recycling, 128, 155–166. https://doi.org/10.1016/j.resconrec.2016.11.001
    22. Hansen, E. G., & Große-dunker, F. (2013). Synonyms Definition Key Issues. Elkington 1992.
    23. Hizarci-Payne, A. K., İpek, İ., & Kurt Gümüş, G. (2021). How environmental innovation influences firm performance: A meta-analytic review. Business Strategy and the Environment, 30(2), 1174–1190. https://doi.org/10.1002/bse.2678
    24. Husgafvel, R., Pajunen, N., Virtanen, K., Paavola, I. L., Päällysaho, M., Inkinen, V., Heiskanen, K., Dahl, O., & Ekroos, A. (2015). Social sustainability performance indicators – experiences from process industry. International Journal of Sustainable Engineering, 8(1), 14–25. https://doi.org/10.1080/19397038.2014.898711
    25. Klewitz, J., & Hansen, E. G. (2013). Sustainability-oriented innovation of SMEs: A systematic review. In Journal of Cleaner Production (Vol. 65, pp. 57–75). https://doi.org/10.1016/j.jclepro.2013.07.017
    26. Küçükoğlu, M. T., & Pınar, R. İ. (2015). Positive Influences of Green Innovation on Company Performance. Procedia - Social and Behavioral Sciences, 195, 1232–1237. https://doi.org/10.1016/j.sbspro.2015.06.261
    27. Larrán Jorge, M., Herrera Madueño, J., Martínez-Martínez, D., & Lechuga Sancho, M. P. (2015). Competitiveness and environmental performance in Spanish small and medium enterprises: is there a direct link? Journal of Cleaner Production, 101, 26–37. https://doi.org/10.1016/j.jclepro.2015.04.016
    28. Li, Y. (2014). Environmental innovation practices and performance: Moderating effect of resource commitment. Journal of Cleaner Production, 66, 450–458. https://doi.org/10.1016/j.jclepro.2013.11.044
    29. Maletič, M., Maletič, D., Dahlgaard, J. J., Dahlgaard-Park, S. M., & Gomišček, B. (2014). The Relationship between Sustainability– Oriented Innovation Practices and Organizational Performance: Empirical Evidence from Slovenian Organizations. Orga, 47(1), 3–13. https://doi.org/10.2478/orga-2014-0001
    30. Maletič, M., Maletič, D., Dahlgaard, J. J., Dahlgaard-Park, S. M., & Gomišček, B. (2016). Effect of sustainability-oriented innovation practices on the overall organisational performance: an empirical examination. Total Quality Management and Business Excellence, 27(9–10), 1171–1190. https://doi.org/10.1080/14783363.2015.1064767
    31. Martínez-Alonso, R., Martínez-Romero, M. J., & Rojo-Ramírez, A. A. (2019). Examining the impact of innovation forms on sustainable economic performance: The influence of family management. Sustainability (Switzerland), 11(21). https://doi.org/10.3390/su11216132
    32. Muangmee, C., Dacko-Pikiewicz, Z., Meekaewkunchorn, N., Kassakorn, N., & Khalid, B. (2021). Green entrepreneurial orientation and green innovation in small and medium-sized enterprises (Smes). Social Sciences, 10(4). https://doi.org/10.3390/socsci10040136
    33. Munodawafa, R. T., & Johl, S. K. (2019). A systematic review of eco-innovation and performance from the resource-based and stakeholder perspectives. Sustainability (Switzerland), 11(21). https://doi.org/10.3390/su11216067
    34. Nor-Aishah, H., Ahmad, N. H., & Thurasamy, R. (2020). Entrepreneurial leadership and sustainable performance of manufacturing SMEs in Malaysia: The contingent role of entrepreneurial bricolage. Sustainability (Switzerland), 12(3100), 1–21. https://doi.org/10.3390/SU12083100
    35. OECD. (2005). Organisation for Economic Co-operation in Communities (3rd Ed.) http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:Oslo+manual#0
    36. OECD. (2009). Policy Brief. Journal of Health and Social Behavior, 53(4), 395. https://doi.org/10.1177/0022146512469014
    37. Przychodzen, J., & Przychodzen, W. (2015). Relationships between eco-innovation and financial performance - Evidence from publicly traded companies in Poland and Hungary. Journal of Cleaner Production, 90, 253–263. https://doi.org/10.1016/j.jclepro.2014.11.034
    38. Pullman, M. E., Maloni, M. J., & Carter, C. R. (2009). Food for thought: Social versus environmental sustainability practices and performance outcomes. Journal of Supply Chain Management, 45(4), 38–54. https://doi.org/10.1111/j.1745-493X.2009.03175.x
    39. Putri, W. H., & Sari, N. Y. (2019). Eco-efficiency and eco-innovation: Strategy to improve sustainable environmental performance. IOP Conference Series: Earth and Environmental Science, 245(1), 1–7. https://doi.org/10.1088/1755-1315/245/1/012049
    40. Rajak, S., & Vinodh, S. (2015). Application of fuzzy logic for social sustainability performance evaluation: A case study of an Indian automotive component manufacturing organization. Journal of Cleaner Production, 108, 1184–1192. https://doi.org/10.1016/j.jclepro.2015.05.070
    41. Rehman, S. U., Kraus, S., Shah, S. A., Khanin, D., & Mahto, R. V. (2021). Analyzing the relationship between green innovation and environmental performance in large manufacturing firms. Technological Forecasting and Social Change, 163(xxxx), 120481. https://doi.org/10.1016/j.techfore.2020.120481
    42. Rennings, K. (2000). Redefining innovation — eco-innovation research and the contribution from ecological economics. Ecological Economics, 32, 319–332. https://doi.org/10.1057/9780230339286
    43. Rodríguez-Espíndola, O., Cuevas-Romo, A., Chowdhury, S., Díaz-Acevedo, N., Albores, P., Despoudi, S., Malesios, C., & Dey, P. (2022). The role of circular economy principles and sustainable-oriented innovation to enhance social, economic and environmental performance: Evidence from Mexican SMEs. International Journal of Production Economics, 248(February), 108495. https://doi.org/10.1016/j.ijpe.2022.108495
    44. Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: Categories and interactions. Business Strategy and the Environment, 20(4), 222–237. https://doi.org/10.1002/bse.682
    45. Sezen, B., & Çankaya, S. Y. (2013). Effects of Green Manufacturing and Eco-innovation on Sustainability Performance. Procedia - Social and Behavioral Sciences, 99, 154–163. https://doi.org/10.1016/j.sbspro.2013.10.481
    46. Singh, S. K., Giudice, M. Del, Chierici, R., & Graziano, D. (2020). Green innovation and environmental performance: The role of green transformational leadership and green human resource management. Technological Forecasting and Social Change, 150(May 2019), 119762. https://doi.org/10.1016/j.techfore.2019.119762
    47. Székely, F., & Knirsch, M. (2005). Responsible leadership and corporate social responsibility: Metrics for sustainable performance. European Management Journal, 23(6), 628–647. https://doi.org/10.1016/j.emj.2005.10.009
    48. Tantayanubutr, M., & Panjakajornsak, V. (2017). Impact of green innovation on the sustainable performance of thai food industry. Business and Economic Horizons, 13(2), 192–209. https://doi.org/10.15208/beh.2017.15
    49. Tariq, A., Badir, Y., & Chonglerttham, S. (2019). Green innovation and performance: moderation analyses from Thailand. European Journal of Innovation Management, 22(3), 446–467. https://doi.org/10.1108/EJIM-07-2018-0148
    50. Tumelero, C., Sbragia, R., & Evans, S. (2019). Cooperation in R & D and eco-innovations: The role in companies’ socioeconomic performance. Journal of Cleaner Production, 207(July 2020), 1138–1149. https://doi.org/10.1016/j.jclepro.2018.09.146
    51. Wayan Edi Arsawan, I., Koval, V., Duginets, G., Kalinin, O., & Korostova, I. (2021). The impact of green innovation on environmental performance of SMEs in an emerging economy. E3S Web of Conferences, 255. https://doi.org/10.1051/e3sconf/202125501012
    52. Weng, H. H. R., Chen, J. S., & Chen, P. C. (2015). Effects of green innovation on environmental and corporate performance: A stakeholder perspective. Sustainability (Switzerland), 7(5), 4997–5026. https://doi.org/10.3390/su7054997
    53. Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101(June 2018), 697–706. https://doi.org/10.1016/j.jbusres.2019.01.010
    54. Yurdakul, M., & Kazan, H. (2020). Effects of eco-innovation on economic and environmental performance: Evidence from Turkey’s manufacturing companies. Sustainability (Switzerland), 12(8), 3167. https://doi.org/10.3390/SU12083167
    55. Zandi, G. R., Ghani, E. K., Lestari, R. M. E., & Maimunah, S. (2019). The impact of management accounting systems, eco-innovations and energy efficacy on firm’s environmental and economic performance. International Journal of Energy Economics and Policy, 9(6), 394–400. https://doi.org/10.32479/ijeep.8364
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright (c) 2025 The Authors

How to cite

Eusebio, E. J. G. (2024). How eco-innovation affects sustainable performance: A systematic review . Multidisciplinary Reviews, 8(6), 2025166. https://doi.org/10.31893/multirev.2025166
Crossref
Scopus
Google Scholar
Europe PMC
  • Article viewed - 342
  • PDF downloaded - 254