The missing link: sustainability innovation practices, non-financial performance outcomes and economic performance

Abstract

Purpose

Innovation is the backbone of sustainability. Although many efforts have been made to conceptualize sustainability-oriented innovations, the impact of these organizational practices on performance has not been adequately explored. This paper, therefore, aims to fill an important gap in the literature by exploring the relationship between sustainability innovation practices and performance outcomes. Specifically, this study examines the relationship between sustainability innovation practices, non-financial performance and economic performance.

Design/methodology/approach

This paper uses partial least squares path modeling (PLS-PM) to estimate both the direct and indirect effects of sustainability practices on economic performance. The data were collected on the basis of a large-scale survey of 266 European organizations.

Findings

The results show that sustainability innovation practices directly and indirectly influence economic performance through non-financial performance outcomes (i.e. innovation performance, environmental performance and social performance).

Originality/value

The scientific value of this paper is provided by showing that sustainability innovation practices lead to certain performance improvements and by providing a model to better understand the links between non-financial performance outcomes and economic performance.

Citation

Maletič, M., Gomišček, B. and Maletič, D. (2021), "The missing link: sustainability innovation practices, non-financial performance outcomes and economic performance", Management Research Review, Vol. 44 No. 11, pp. 1457-1477. https://doi.org/10.1108/MRR-09-2020-0562