Sustainability, business strategy and innovation: a thematic literature review

Abstract

Purpose Challenges related to sustainability have increasingly become pivotal in the realm of business strategy and innovation. Nevertheless, the incorporation of sustainability principles into business strategies and innovative practices remains a subject of ongoing scholarly debate. This paper aims to undertake a thematic literature review on this theme. Design/methodology/approach Data were gathered from the Scopus, Web of Science and Science Direct databases. The final sample comprised 85 papers. For analytical purposes, this study adopted topic modeling using Latent Dirichlet Allocation (LDA) methodology. Findings The authors identified five dominant topics concerning the relationship between sustainability, innovation and business strategy. Through a cross-analysis of these topics, the authors theorize that a sustainable innovation strategy encompasses three complementary and interdependent dimensions: capabilities, management and firm. Building on this analysis, the authors outline a research agenda aimed at further exploration and advancement of this theme. Practical implications This review enhances the synthesis of research on the theme, prompting reflections on how companies can initiate innovative sustainable actions that align with their business strategy. Additionally, the authors identify specific elements that require improvement to enhance each of the three dimensions of sustainable innovation strategies, such as eco-efficiency, circular economy and the adoption of innovative business models oriented toward services/servitization. Social implications By interweaving sustainability with innovation and business strategy, this study underscores the critical topics that companies and public policymakers should address to support sustainable development at the national level. Originality/value While previous literature reviews have focused on the dyadic relationships between sustainability and strategy, or sustainability and innovation, this study extends the boundaries of knowledge by integrating these three concepts into a hybrid theoretical stream.