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Challenges and trade‐offs in corporate innovation for climate change

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  • Jonatan Pinkse
  • Ans Kolk

Abstract

The international debate on addressing global climate change increasingly points to the role that companies can play by using their innovative capacity. However, up till now companies have been rather cautious in taking decisive steps in facilitating an innovation‐based transition towards a low‐carbon economy. This paper conceptually explores some key challenges related to innovating for climate change, in the broader context of technological change, complementary capability development and sociotechnical systems, to point to trade‐offs to be made by companies. We adopt a firm‐level perspective to discuss (a) how companies strike a balance between further development and deployment of emissions‐reducing technologies, in view of the fact that there is no ‘silver bullet’ solution for climate change yet, (b) how and in what way low‐carbon solutions are brought to the market, by targeting consumers in either mainstream markets or niche markets, and (c) to what extent the success or failure of climate change innovations depends on companies' bargaining power and willingness to cooperate with others. The paper shows how several industry‐ and firm‐specific factors – technological dynamism, complementarity between new technologies and existing assets, and ownership of specialized assets for commercialization – influence how companies strike a balance between the different trade‐offs and deal with the uncertainty created by the current ‘climate policy deadlock’. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

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  • Jonatan Pinkse & Ans Kolk, 2010. "Challenges and trade‐offs in corporate innovation for climate change," Business Strategy and the Environment, Wiley Blackwell, vol. 19(4), pages 261-272, May.
    • Handle: RePEc:bla:bstrat:v:19:y:2010:i:4:p:261-272
    DOI: 10.1002/bse.677
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    2. Kim, Sang Joon & Atukeren, Erdal & Kim, Hohyun, 2023. "Does the market's reaction to greenhouse gas emissions differ between B2B and B2C? Evidence from South Korea," Finance Research Letters, Elsevier, vol. 53(C).
    3. Denicolai, Stefano & Zucchella, Antonella & Magnani, Giovanna, 2021. "Internationalization, digitalization, and sustainability: Are SMEs ready? A survey on synergies and substituting effects among growth paths," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    4. Narayanan, Venkateshwaran & Baird, Kevin & Tay, Richard, 2021. "Investment decisions: The trade-off between economic and environmental objectives," The British Accounting Review, Elsevier, vol. 53(3).
    5. Szalavetz Andrea, 2018. "Sustainability-oriented cross-functional collaboration to manage trade-offs and interdependencies," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(1), pages 3-17, March.
    6. De Marchi, Valentina & Molina-Morales, F. Xavier & Martínez-Cháfer, Luis, 2022. "Environmental innovation and cooperation: A configurational approach," Technological Forecasting and Social Change, Elsevier, vol. 182(C).

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