Sustainable innovations in the corporate sector – The empirical evidence from IBEX 35 firms

Abstract

Sustainable innovation practices, those which simultaneously contribute to environmental, social and economic value creation, have drawn increased attention from academics, industry leaders and policy makers around the globe. There is a general agreement that innovation is a very important part of the puzzle in achieving long-term sustainability. Thus, a critical question to be answered is what factors actually differentiate, and appear to contribute to, sustainable innovations (SI) at the firm level. This paper addresses the question by examining empirical evidence from the IBEX 35 companies, from the years 2010–2015. Our results obtained from multivariate regression model indicate that the intensity of a firm’s SI activity is strongly and statistically significantly associated with the sector in which a given firm operates, with a rising level of environmental footprint acting as a stimulant for innovation. Additionally, firms characterized by higher net profit margins and returns on equity were also much more likely to introduce SIs. The findings also suggest that factors like size and age of a given company, as well as level of competition in a sector in which it operates are not significant predictors for the implementation of sustainable innovations. Overall, this study contributes to our understanding of the main characteristics of companies active in the area of SI.