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Profiting from ECO-innovation: the RolE of BUSiness model

Periodic Reporting for period 1 - ECO_REBUS (Profiting from ECO-innovation: the RolE of BUSiness model)

Reporting period: 2017-05-01 to 2019-04-30

The topic of eco-innovation has started to play an increasingly central role in policy makers’ agenda. To date, eco-innovation policies have achieved tangible results. Yet, despite important results have been reached, there is room to make eco-innovation policies’ impact more profound and incisive on companies and society as a whole. Using a multi-level approach, the researcher aimed to provide a granular representation of the process with which firms adopting voluntary eco-innovation policies can turn a stimulus to create ‘green’ offerings into positive economic impacts for the organisation. Ultimately, the contribution is to explore the micro-level mechanisms that can foster the adoption of eco-innovation by individual firms, and, in doing so, promoting the diffusion of sustainable practices at the population level.

The project aimed to get a closer understanding of the process with which firms adopt and operate voluntary eco-innovation policies by assigning a specific role to the concept of business model, defined as the configuration of customer sensing, customer engagement, value delivery and monetization components that captures causal links between value creation and value capture at the business level (Baden-Fuller; Mangematin, 2013). More specifically, by integrating the literature on eco-innovation and the literature on business model, the researcher addressed two major themes in the context of eco-innovation adoption/diffusion:

First, embracing a cognitive angle, she has explored whether and to what extent the concept of business model affects the way top management team members (as key decision makers within firms) appreciate both the opportunities and the challenges of adopting eco-innovations that are not only new to the firm, but they are also new to the market.
Second, by adopting a processual approach to strategy the researcher has investigated the phases and sub-phases through which eco-innovationn are adopted and operated by firms. In this context, particular attention will be paid to how and why changing the business model can help firms to accommodate the challenges of eco-innovation adoption and, in turn, to improve firm economic performance.
The researcher has developed a systematic literature review on business models for eco-innovation. The review article undertook two stages of screening the available literature and selected 151 peer-reviewed articles published between 2007 and early 2019. This paper advanced the debate on the need for alternative concepts of doing business that goes beyond the creation of economic value for a company in a way that generates value for the society.
Moreover, the researcher has conducted a series of semi-structured interviews with top management team (TMT) members. Interviews results have clarified how business model components are grounded in the cognitive maps of (TMT members). Preliminary results revealed that the concept of the business model (including its multiple dimensions) affects in some cases the way top management team members appreciate both the opportunities and the challenges of adopting voluntary eco-innovation policies. Moreover, interviews highlighted that some elements characterizing causal beliefs guiding top managers’ evaluation of eco-innovation policies include innovation aspects, project’s features, aspects related to the eco-innovation they are searching, aspects related to the mission and key sustainability values linked to the company.
The researcher has also conducted a case study on multiple business units. Specifically, she collected data from different eco-innovation projects. Main preliminary findings show that in most of the eco-innovative projects studied the business model is changed. Some cases showed that is not always straightforward to establish to what extent the adoption of the eco-innovation (and the business model change) has increased the economic performance of the business unit or of the company linked to the specific project. This aspect is particularly evident in more recent eco-innovation projects, where the impacts on the performance would be clearer in the next years.

The researcher participated in the Academy of Management Conference in Atlanta in August 2017, the most important yearly conference on management in the world. Her ECO_REBUS project was selected by two excellent events organized by the Conference: the ‘Cognition in the Rough’ Workshop and the ‘Content Analysis Professional Development’ Workshop. In both events, she presented the project during interactive roundtable sessions where researchers and professors from different universities in the world provided feedback on it. Moreover, the researcher presented her project to the Business Model Day at Cass Business School in London; and her review paper during the Research Forum at UCL in May 2020.

Numerous communication activities on the project have been carried out through newsletter and press release for example.
The novel contribution of the review paper is the first comprehensive systematic review of business models in the field of environmental sustainability. By identifying main research trends and relevant gaps in the literature and by providing future research avenues, the paper advanced the debate on the need for alternative concepts of doing business that goes beyond the creation of economic value for a company in a way that generates value for the society. Moreover, prior studies on the adoption of eco-innovation policies mainly rely upon secondary-source data. The innovation aspects of the main outputs of this project consist of the primary sources of data collected by the researcher through interviews and case studies.

The work carried out aiming to identify the role of business models in eco-innovation decisions, and the impact of eco-innovation on performance has also positive impacts at a societal level. For example, findings related to how business models affect eco-innovation adoption decisions, may help companies wishing to adopt green innovations: 1) to clarify which business model’s components can be considered to take these decisions; 2) to increase eco-innovation adoption and, in turn, improve the environmental performance at a private and social level.
This project can contribute towards the policy objectives aiming to spur eco-innovation as a key to the future competitiveness of countries and of the business sector, and can inform policies aiming to support green strategies at the firm level.