Green Innovation as A Conceptual Framework

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Jacob Guinot	--	2174	2023-09-01 10:12:36	\|
2	Format changes.	Jacob Guinot	+ 2 word(s)	2176	2023-09-01 10:14:42	\| \|
3	Format changes	Jacob Guinot	Meta information modification	2176	2023-09-01 10:16:20	\| \|
4	layout	Jessie Wu	-135 word(s)	2041	2023-09-01 10:27:20	\| \|
5	layout	Jessie Wu	Meta information modification	2041	2023-09-01 10:28:22	\|

This entry is adapted from the peer-reviewed paper 10.3390/su14105787

The growing emergence of environmental problems has meant that sustainability and related concepts such as green innovation have acquired special importance. This has resulted in a significant body of literature addressing these concepts.

green innovation environmental sustainability

1. The Concept of Green Innovation

Green innovation (GI) has become one of the most important strategic tools for effective sustainable development ^[1]. In the past, investing in environmental activities was unnecessary, however, strict environmental regulations and widespread environmentalism have changed the competitive rules in practice ^[2]. This has led to an expansion of methods and processes linked to environmental sustainability, such as GI. Moreover, given that in recent years consumer awareness of sustainability has been growing, many companies have used the green agenda as an engine for achieving a business model based on GI ^[3]. Thus, GI practices are a logical response to the requirements of the customer, who is willing to pay more for sustainable products and who expects increasingly responsible products and services from firms ^[2]^[4]. In fact, previous research (e.g., ^[5]^[6]) indicates that GI initiatives contribute to the improvement of a company’s performance and competitiveness as GI practices increase product value and create competitive advantages using ecological differentiation.

As noted above, the literature suggests that innovation is the sum of “design + product”. Accordingly, GI can be defined as the sum of “eco-design + eco-production” as GI involves the development of ecological products or processes, applying innovations in technologies that involve energy saving, pollution prevention, and ecological product designs ^[2]^[6]. Similarly, Wang et al. ^[7] define GI as those innovations that focus on achieving sustainable development and the conservation of natural resources through the development of greener products and services. Along the same lines, some authors (e.g., ^[8]^[9]) define green innovation as the development of sustainable products and processes through the use or adoption of environmentally friendly raw materials during the manufacturing or design process. This process also involves the application of the principle of eco-design or eco-production. That is to say, the environment is taken into consideration from the moment a product or process idea is conceived, and not only at the end of its useful life ^[10]. Accordingly, although GI has mainly focused on production processes some companies have expanded this trend not only by redesigning their production but all of their processes, including distribution channels and after-sale service ^[11]. Hence, GI is an innovation that is included in the entire business cycle, that is, in the design, production, supply, and end-use of commercial products, which mainly contribute to environmental sustainability ^[12]^[13].

It can therefore be noted that the main objective of GI is to reduce human-induced material flows and promote sustainability goals ^[14]. GI includes the adoption of “eco-innovation” in corporate practices, which means the implementation and development of innovations that minimize environmental and social damage and produce economic improvements. This eco-innovation stemming from GI is understood as a balance between the different pillars of sustainability (see Figure 1).

Figure 1. Eco-innovation position in sustainable development.

Furthermore, the use of environmentally friendly raw materials, or what is known as “eco-friendly using”, which goes hand in hand with GI, leads to several relevant benefits that can differentiate the company from competitors ^[15]. These benefits include cost reduction, improved company reputation, increased business opportunity, and the attracting of new investors and customers ^[15]^[16]. Therefore, GI is associated with better environmental management and environmental performance. In this way, GI in processes and products not only reduces the negative environmental impact of the business but also increases organizational performance through waste and cost reduction ^[1]. A paradigmatic case of a company that applies the fundamentals of GI is Patagonia Inc. This company manufactures sportswear following a management philosophy based on reducing negative environmental impact by creating recyclable, reusable, and durable products. This requires that they apply GI in the design of their products so that they can achieve an environmentally sustainable product. This would be a good example of a company that follows the precepts of what is meant by environmental management and has been commonly held up as a model of companies that apply eco-innovation ^[17].

2. The Role of Governing Bodies in Promoting Green Innovation

As has been indicated above, to promote competitiveness based on sustainable production, it is crucial that technology and innovation policies in the public and private sectors are aligned. For this purpose, governing bodies can intervene in GI policy to mitigate the “blocking” effects ^[18] of the closed cycle that limit the implementation of disruptive eco-innovative solutions and make their use more difficult, as new technologies may not be easily compatible with current ones. Moreover, in 2004, to advance the implementation of GI, the “Environmental Technology Action Plan (ETAP)” placed GI among the priorities of European technology policies supported by the European Lead Market Initiative (LMI) and created the Eco-Innovation Observatory (EIO). In turn, the community guidelines on state aid for environmental protection provided for the possibility of aid in the case of GI, and the European Commission facilitated the dissemination of good practices in this field and published several documents and reports. However, the volume of funding to support innovation has been modest and there are gaps in the current funding and promotion programs, such as the Competitiveness and Innovation Framework Programme (CIP), the Seventh Framework Programme (FP7), and the Environmental Technologies Action Plan (ETAP).

From a regulatory point of view, at the European level in GI, researchers must mention the Directive of 21 October 2009, which establishes a framework for setting eco-design requirements for products related to energy consumption and electrical appliances. Despite the limited amount of funds allocated to GI, the European Union is one of the most important players in supporting the eco-industry and the green sector. In addition, the “Eco-Innovation” program is the latest instrument of an encouraging policy aimed at strengthening Europe’s environmental and competitive position by supporting innovative solutions that protect the environment and create a wider market for “green” technologies, management methods, products, and services. By focusing on institutions at the national level, for example, in Spain the reference framework is the “State Innovation Strategy”, the cooperation between the public and private sectors and the coordination of actions in different regions as a priority is established.

Gibbs et al. ^[19] suggest that governing bodies have the mission of defining priorities, regulating, monitoring, and promoting the interest of the private sector towards long-term decision making and the implementation of eco-innovative processes. Therefore, governing bodies play a very important role in the promotion and creation of organizations that develop GI. Many companies are still unaware of the benefits and importance of GI, especially small businesses, or SMEs, and those that know the importance of GI find it difficult to finance the necessary investments. Therefore, despite the creation of these laws and government support, there is still a need for a greater institutional drive to support this type of innovation. More institutional economic support is particularly necessary to overcome existing financing barriers and create organizations with a culture based on GI or eco-innovation.

3. Green Innovation Measurement

GI can be measured like any other type of innovation. However, its essential component of eco-efficiency makes it difficult to evaluate actions in their entirety because it requires the measurement of different innovation factors (social, economic, and environmental) throughout the innovation process, both radical and incremental ^[2]. Specific indicators are therefore needed to measure GI, and several international institutions have chosen to use indicators or lead systems to measure eco-innovation, which are mentioned below (Table 1). It should be noted that these indicators are the most widely used, although different ones can be found.

Table 1. GI indicators used by different institutions.

Indicators	Institution	Applicability
Group of indicators	OCDE	Environment
Innobarometer	European Commission	State of innovation
Sustainable Development Indicators Group (SDI)	Eurostat	Development R + D + i, Environment
Living planet Index and Ecological Footprint	WWF	Environment
Corporate Social Responsibility	Global Reporting Initiative	Organizations
ISO 26000 Standardization Standards	International standardized organization	Organizations and public entities
Group of indicators of the objectives of Millennium Development	United Nations	Environment, Human Development

Source: ^[14].

As can be seen in Table 1, the different indicators have different scopes of application and levels of analysis. This makes it clear that common indicators are needed that can be systematically applied to the measurement of GI or eco-innovative actions. Therefore, this shows researchers that there are few robust scales to measure GI ^[20]. Specifically, validated scales including specific indicators for measuring GI actions. Song et al. ^[21] indicate that there is no uniformity of measurement in this area, no permanent statistics are available, and there is a need to overcome deficiencies in methodology by designing activity-specific indicators, with the additional problem that GI is not yet considered a separate official sector of innovation, which makes data collection particularly costly.

It should be noted that the European Union is starting over the years to finance specific lines to respond to the problems of measuring the activities undertaken in GI. For example, Kemp and Pearson ^[22] highlight various measurement methods, such as survey analysis, patent analysis, and digital and documentary source analysis. In addition, the OCDE studies the strengths and weaknesses of existing indicators and methodologies and provides guidelines for future improvements in measuring GI. Therefore, researchers can point out that although some indicators exist for the measurement of GI, there is a need to develop more valid scales that can be applied to different geographical areas (regional, national, or international) and levels of analysis (companies vs. public organizations).

4. The Role of Technology Centers in the Green Innovation Processes

Technology centers have innovation as a primary field of action. Accordingly, these centers could be a great support for GI and its expansion by developing GI projects ^[2]. Technology centers can create projects where activities are developed to improve efficiency and results and to reduce environmental damage. In other words, they can implement innovative and sustainable projects. Hence, technology centers can implement actions to promote new technologies and eco-design ^[23]. These actions may include leadership actions and active participation of mixed consortiums with industries, European Union projects and other international initiatives, investments in the design of public experimental facilities, and technological collaboration.

On the other hand, according to Chen et al. ^[24], technology centers can support GI management by making free tools for measuring GI initiatives available to companies and governing bodies or by promoting the use of shared resources, free user-friendly tools, training support and specific tools in GI management. Moreover, other authors suggest that technology centers can implement and disseminate GI through outreach actions that promote eco-efficiency, energy efficiency, rational use of resources and materials, innovation that stimulates eco-innovation, and sustainability initiatives ^[25]. Provision by these centers of elements, equipment, spaces, and common services, together with the access to specialized human resources that they can offer, may also help to promote the conditions that facilitate GI actions. In accordance, technology centers may play a very important role in disseminating and implementing GI. However, many of them are not particularly focused on GI. In fact, some authors (e.g., ^[2]) have noted this trend by suggesting that these centers make greater efforts in promoting GI.

5. Conclusions

This research is intended to serve as a lynchpin for the continuation of the GI debate. In this way, the theoretical framework developed here could encourage further exploration of this concept. Although GI is a concept that is key to ensuring environmental protection and the future of the planet, there is still a long way to go in this field. Researchers hope that the conceptual foundations explored throughout this research can be a guide to better understanding the concept and awaken greater academic interest. Future research could be directed at further deciphering the background of GI. For example, human resource management could play a key role in this regard by promoting GI processes. Although some progress has been made in deciphering this role, there is still a long way to go. Moreover, to underpin the importance of GI, more studies should be conducted to empirically demonstrate its effects on variables such as company performance or competitiveness. Another relevant question is to find out the role of organizational culture on the generation of GI, including what types of specific behaviors among employees are necessary to encourage it. Researchers hope that the ideas summarized in this research inspire further exploration of these and other issues that affect the concept of GI, and will ultimately lead to a more sustainable economy.

References

Weng, H.H.R.; Chen, J.S.; Chen, P.C. Effects of green innovation on environmental and corporate performance: A stakeholder perspective. Sustainability 2015, 7, 4997–5026.
Chen, Y.S.; Chang, C.H.; Wu, F.S. Origins of green innovations: The differences between proactive and reactive green innovations. Manag. Decis. 2012, 50, 368–398.
Henriksen, K.; Bjerre, M.; Øster, J.; Bisgaard, T. Green Business Model Innovation—Policy Report; Nordic Council of Ministers: Copenhagen, Denmark, 2012.
Tang, M.; Walsh, G.; Lerner, D.; Fitza, M.A.; Li, Q. Green innovation, managerial concern and firm performance: An empirical study. Bus. Environ. 2018, 27, 39–51.
Schiederig, T.; Tietze, F.; Herstatt, C. Green innovation in technology and innovation management–an exploratory literature review. R&D Manag. 2012, 42, 180–192.
Borsatto, J.M.L.S.; Bazani, C.L. Green innovation and environmental regulations: A systematic review of international academic works. Environ. Sci. Pollut. Res. 2021, 28, 63751–63768.
Wang, G.; Li, Y.; Zuo, J.; Hu, W.; Nie, Q.; Lei, H. Who drives green innovations? Characteristics and policy implications for green building collaborative innovation networks in China. Renew. Sust. Energ. Rev. 2021, 143, 110875.
Jabbour, C.J.C.; De Freitas, T.P.; Soubihia, D.F.; Gunasekaran, A.; de Sousa Jabbour, A.B.L. Green and competitive: Empirical evidence from ISO 9001 certified Brazilian companies. TQM J. 2015, 27, 22–41.
Albort-Morant, G.; Leal-Millán, A.; Cepeda-Carrión, G. The antecedents of green innovation performance: A model of learning and capabilities. J. Bus. Res. 2016, 69, 4912–4917.
MacDonald, E.F.; She, J. Seven cognitive concepts for successful eco-design. J. Clean. Prod. 2015, 92, 23–36.
Raworth, K. Doughnut Economics: Seven Ways to Think like a 21st-Century Economist; Chelsea Green Publishing: Chelsea, VT, USA, 2017.
Fei, J.; Wang, Y.; Yang, Y.; Chen, S.; Zhi, Q. Towards eco-city: The role of green innovation. Energy Procedia 2016, 104, 165–170.
Takalo, S.K.; Tooranloo, H.S. Green innovation: A systematic literature review. J. Clean. Prod. 2021, 279, 122474.
Bleischwitz, R.; Bahn-Walkowiak, B.; Irrek, W.; Schepelmann, P.; Schmidt-Bleek, F.; Giljum, S.; Lutter, S.; Bohunovski, L.; Hinterberger, F.; Hawkins, E. Eco-innovation-putting the EU on the path to a resource and energy efficient economy. In Wuppertal Spezial: No. 38; Wuppertal Institut für Klima: Wuppertal, Germany, 2009.
Hwang, J.; Cho, S.B.; Kim, W. Consequences of psychological benefits of using eco-friendly services in the context of drone food delivery services. J. Travel Tour. Mark. 2019, 36, 835–846.
Tang, Q.; Ma, Z.; Wu, H.; Wang, W. The utilization of eco-friendly recycled powder from concrete and brick waste in new concrete: A critical review. Cem. Concr. Compos. 2020, 114, 103807.
Guinot, J. Sustainable Organisations. In Change and Development in Organisations; Routledge: London, UK, 2021; pp. 107–117.
Carrillo-Hermosilla, J. A policy approach to the environmental impacts of technological lock-in. Ecol. Econ. 2006, 58, 717–742.
Gibbs, D.; Deutz, P.; Proctor, A. Industrial ecology and eco-industrial development: A potential paradigm for local and regional development? Reg. Stud. 2005, 39, 171–183.
Song, W.; Yu, H. Green innovation strategy and green innovation: The roles of green creativity and green organizational identity. Corp. Soc. Responsib. Environ. 2018, 25, 135–150.
Song, M.; Fisher, R.; Kwoh, Y. Technological challenges of green innovation and sustainable resource management with large scale data. Technol. Forecast. Soc. Chang. 2019, 144, 361–368.
Kemp, R.; Pearson, P. Final Report MEI Project about Measuring Eco-Innovation; UM Merit: Maastricht, The Netherlands, 2007; Volume 10, pp. 1–120.
Foxon, T.; Pearson, P. Overcoming barriers to innovation and diffusion of cleaner technologies: Some features of a sustainable innovation policy regime. J. Clean. Prod. 2008, 16, S148–S161.
Chen, Y.S.; Lai, S.B.; Wen, C.T. The influence of green innovation performance on corporate advantage in Taiwan. J. Bus. Ethics 2006, 67, 331–339.
Sánchez-Sellero, P.; Bataineh, M.J. How R&D cooperation, R&D expenditures, public funds and R&D intensity affect green innovation? Technol. Anal. Strateg. Manag. 2021, 1–14.

© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.

Upload a video for this entry

Information

Subjects: Business

Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :

Jacob Guinot

Zina Barghouti

Ricardo Chiva

View Times: 409

Update Date: 01 Sep 2023

Table of Contents

Video Upload Options

Confirm