Organizing, Assessing, and Protecting Sustainable Innovation in Established Firms

Abstract

Sustainable innovation has become critical for established firms as climate change, resource scarcity, regulation, and shifting stakeholder expectations increasingly challenge existing ways of creating value. However, while firms recognize the strategic importance of sustainability, they often struggle to implement sustainable innovation in practice. Such initiatives are difficult to manage because they involve long time horizons, uncertain returns, systemic effects, high investment needs, and tensions between economic, environmental, and organizational priorities. This creates a central challenge: how can established firms organize, assess, and protect sustainable innovation during uncertainty when its value is often uncertain, long-term, and difficult to measure? This thesis explores this challenge through a dynamic capabilities perspective, focusing on how firms sense sustainability-related opportunities, seize them through evaluation and resource allocation, and reconfigure structures, routines, and capabilities over time. The study follows a qualitative, abductive research design, combining a literature review with semi-structured interviews in established Swedish companies. The empirical material was analyzed through thematic analysis and a Gioia-inspired approach. The findings show that sustainable innovation is not managed through one fixed structure, metric, or protection mechanism. Instead, firms balance integration into the core business with separation into exploratory spaces, supported by boundary-spanning roles, cross-functional interfaces, and temporary project structures. The study further finds that ROI remains important but is insufficient, as sustainable innovation is also assessed through strategic fit, customer value, sustainability impact, risk, learning, market access, and future option value. Finally, protecting sustainable innovation during uncertainty often means preserving critical capabilities, knowledge, relationships, and strategic options through slowing down, sequencing, relocating, or reconfiguring initiatives rather than simply continuing or abandoning them.