Environmental innovations and product performance: A resource based view on climate mitigation

Abstract

Increasing awareness of climate change has deeply altered the competitive landscape of the automobile industry, pressuring its companies to come up with environmental innovations. From a resource-based perspective, this article investigates the effects of different environmental innovations on product-related environmental performance. We analyze product stewardship and sustainable development innovations of 25 automobile companies over a six-year period and assess their effects on the CO2 emission levels of vehicles. The findings suggest that companies deploying resources and capabilities towards sustainable development innovations can significantly achieve reductions on product-related CO2 emissions. For product stewardship innovations we cannot find any similar support. However, companies that embark on an ambidextrous strategy towards high levels of product stewardship and sustainable development innovations may amplify the reduction effect on product-related CO2 emissions.