Environmental innovation, eco-innovation or sustainable innovation refers to innovation focused on the systematic development of new products, services, processes, or business models that significantly reduce environmental harm while creating economic and social value.[1][2] Beyond technological and environmental dimensions, sustainable innovation extends to incorporate behavioral, cultural, and systemic transformations that foster long-term ecological balance, social equity, and economic viability.[3] It plays a crucial role in addressing climate change, biodiversity loss, and resource depletion while aligning economic growth with environmental protection and social well-being.[4] Environmental sustainable innovation integrates environmental considerations into all stages of innovation, aligning with circular economy principles, green technologies, and clean production practices.[1][5] It encourages organisations to transition from linear production models to restorative and regenerative systems.[6]
Sustainable innovation prioritizes long-term ecological balance, social equity, and economic viability by integrating technological advancements with behavioral, cultural, and systemic transformations.[3][7][8] According to Andrew Hargadon, sustainable innovation involves the development of financially viable products that support healthy environments and communities, distinguishing it from conventional innovation strategies that often disregard these criteria.[8]
A key distinguishing feature is its focus on the behavioral dimension of sustainability, acknowledging that people's behaviors are influenced by social, economic, and environmental conditions, and these behaviors significantly impact the economy, environment, and society.[9] This dimension emphasizes the need for interventions that promote positive and lasting behavioral changes, aligning closely with behavioral design principles and behavioral economics.[10]
The concept has gained significant attention in scholarly literature, with researchers highlighting its systemic, impact-oriented, and inclusive nature, particularly through the work of Michele Visciòla and others who emphasize thinking as behavioral scientists while acting as designers.[3][11][12]
Key characteristics
These innovation encompasses a broad range of technological and non-technological characteristics. These characteristics highlight how businesses, industries, and institutions adopt different mechanisms, ranging from incremental improvements to systemic transformations, to advance sustainability objectives.[13]
Key Characteristics
Technological
Technological eco-innovations focus on modifying, redesigning, and creating processes and products to reduce environmental impacts while maintaining or improving economic performance.[14] They typically involve cleaner production methods, resource efficiency measures, life-cycle thinking, and the development of closed-loop manufacturing systems.[13]
Resource Efficiency (Eco-efficiency, Cleaner Production): Reducing the use of finite resources and energy throughout production and consumption processes while integrating renewable energy where possible. This aligns with eco-efficiency and cleaner production mechanisms, focusing on modification and redesign of existing processes to reduce input needs.[15]
Pollution and Waste Reduction (Pollution Control): Minimizing emissions, pollutants, and waste generation across the product life cycle aligns with pollution control and cleaner production, focusing on modification of existing production systems for lower environmental impact.[16]
Circular Economy (Closed-loop Production, Life-cycle Thinking): Designing products and processes for repairability, reusability, and recycling to extend product lifespans aligns with closed-loop production and life-cycle thinking, emphasizing alternatives and creation within technological eco-innovation mechanisms.[17]
Non-Technological
Non-technological eco-innovations address system-level and organizational changes required for sustainability transitions. They involve rethinking institutions, business models, marketing methods, and value chains to embed sustainability principles across all stages, from design and production to consumption and disposal.[13]
Systemic Approach (Industrial Ecology) Restructuring value chains, business models, and industrial systems to embed sustainability principles at every stage, from design to disposal.[18][19] This aligns with industrial ecology, focusing on system-level creation and alternatives for eco-innovation that go beyond technological changes, addressing institutions and organizational structures.[20]
Behavioral and Cultural Transformation: Sustainable innovation recognizes that lasting change requires shifts in societal values, norms, and behaviors over time.[3][21][22] This includes addressing bounded rationality as a key factor inhibiting behavioral change, going beyond mere nudging strategies to focus on measures that induce strong cognitive impact to boost intended behavioral changes.[23] The alignment of social, technological, and cultural dimensions in innovation journeys is essential for achieving sustainable outcomes.[3]
Key Dimensions of Sustainable Innovation
Sustainable innovation expands the traditional three dimensions of sustainability—environmental, economic, and social—by incorporating the often-overlooked behavioral and cultural dimensions. Some perspectives also include political dimensions, making sustainable innovation a comprehensive framework for addressing multifaceted challenges.[3][24] The integration of environmental, social, and governance (ESG) principles into innovation strategies is emphasized to restore natural ecosystems and promote circularity.[25]
Behavioral Dimension
The behavioral dimension is central to all 17 interlinked objectives of the Sustainable Development Goals (SDGs), which serve as a "shared blueprint for peace and prosperity for people and the planet, now and into the future."[25] This dimension acknowledges that sustainable innovation contributes to the economic transition towards a circular economy and multiple value creation, necessitating radical business model transformations.[7] Sustainable innovation strategies must align with the triple bottom line—economic, social, and environmental outcomes—to achieve long-term impact.[26]
Cultural Evolution and Progress
Sustainable innovation is closely linked to cultural evolution and societal progress, emphasizing the transformation of societal values and norms over time. The role of power dynamics in technological progress highlights how innovation can either reinforce existing inequalities or drive inclusive societal advancements. [27] Sustainable innovation seeks to ensure that technological revolutions align with broader social benefits rather than exacerbating disparities.
Types
Sustainability can be achieved through different types of innovation. Here are four key approaches:
Product innovation
Creating eco-friendly goods that meet consumer demands and lessen environmental damage.[28][29][30] Examples include the use of non-toxic chemicals, biodegradable and compostable materials, and goods that require less energy when in use.[31]Modular designs that provide simpler maintenance and upgrades, extending product life and lowering the need for additional resources, are another example of product improvements.[32]
Process innovation
The use of low-emission, energy-efficient, and cleaner manufacturing techniques in industrial processes.[33][34] This involves setting up closed-loop water or material systems to decrease resource usage and pollution during industrial operations, using renewable energy inside production lines, and using sophisticated manufacturing technologies that minimise waste and emissions.[34][35]
Business model innovation
Creating and adopting new ways of delivering value that align profitability with sustainability, such as product-as-a-service models, leasing systems, and sharing platforms.[36] These models encourage users to access rather than own products, promoting higher utilisation rates, enabling take-back and reuse systems by maintaining control over product life cycles to facilitate reuse, refurbishment, or recycling.[37]
System-Level innovation
Promoting significant changes in cities and industries to promote sustainable development. Examples include creating integrated zero-waste industrial parks, constructing smart city systems to maximise energy and resource use.[38][39]
Challenges
Environmental sustainable innovation faces multiple challenges that can slow adoption and effectiveness despite its critical role in sustainability transitions:
High Upfront Costs: Developing sustainable technologies and processes often involves significant initial investments in research, establishisng production systems, and building new infrastructure.[40]
Technological and Market Uncertainty: Many eco-innovations involve emerging technologies with unproven reliability at scale, leading to concerns about maintenance and return on investment.[41] Additionally, limited consumer demand for green products can hinder market development, making it challenging for innovators to justify early adoption.[42]
Regulatory Complexity: Inconsistent or fragmented environmental policies across regions can create uncertainty, making firms hesitant to invest in eco-innovations without clear, stable policy signals or supportive frameworks.[43]
Market Resistance and Consumer Behaviour: Even when green technologies are available, persistent consumer habits, limited awareness of environmental benefits, and perceptions of higher costs can slow their adoption, requiring targeted education and incentives to shift demand.[42]
Infrastructure Constraints: Many sustainable innovations depend on supporting infrastructure such as renewable energy grids, electric vehicle charging networks, and advanced recycling systems.[40][44]
↑Knudson, Haley (2023), Fet, Annik Magerholm (ed.), "Business Models for Sustainability", Business Transitions: A Path to Sustainability: The CapSEM Model, Cham: Springer International Publishing, pp.101–112, doi:10.1007/978-3-031-22245-0_10, hdl:11250/3122992, ISBN978-3-031-22245-0
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