Sustainability Challenges Shaping Competitive Advantages in Technology and Innovation

Living reference work entry
Part of the Sustainable Development book series (SD)


How do sustainability challenges shape the competitive behavior of corporations? Does investing in sustainability actually pay off? The chapter studies the current state of the world in terms of its environmental limits, reaching from climate change to biodiversity. It highlights population growth as the main driver for exceeding some environmental planetary boundaries and makes the link to the type of technologies currently used. The case is made that no country which enjoys high standards of living appears to be living within its environmental limits. Given forecast rapid population growth and the legitimate drive to raise standards of living for all, the need for technological change and innovation is presented in a new dimension. The traditional approach to innovation and competitive advantages is analyzed and the necessity to integrate sustainability into the methodologies is stressed. It is shown that the integration of sustainability into the core business strategy of a corporation is becoming a determining factor for future competitive advantage. Two examples, one from the automotive sector and one from the consumer goods sector, are provided. Furthermore, the key challenge in measuring environmental and social performance is highlighted and current developments presented. The integration of the materiality aspect by the Sustainability Accounting Standards Board is crystallized as a key milestone in sustainability accounting. Finally, the case is made that sustainability does create financial outperformance.


Corporations that integrate sustainability into their core strategy are the winners of tomorrow Technological change and innovation is absolutely necessary to tackle the sustainability challenge Measuring the sustainability performance of a corporation remains a challenge Sustainability accounting standards based on materiality are a promising way forward Sustainability outperforms financially Corporate responsibility Carbon-free economy 


  1. BBC (2015) Business. Accessed on 16 Jan 2017
  2. Footprintnetwork (2017) Our work. Ecological Footprint. Accessed 10 Jan 2017
  3. French Law (2015) Loi sur la transition énergétique. Accessed 16 Dec 2016
  4. GRI (2017) Global reporting network. Accessed 2 Feb 2017
  5. IUCN (2017) Species extinction – the facts. Accessed 30 Jan 2017
  6. Kharas H (2017) The unprecedented expansion of the global middle class. Global Economy and Development, Working Paper 100. BrookingsGoogle Scholar
  7. Lucius H (1995) The Catching-Up Index. Dissertation, Technical University of ViennaGoogle Scholar
  8. Lucius H (2013) Nachhaltige Veranlagungen – Entwicklungen in der Veranlagungspraxis, Journal of Banking and Financial Research - Bankarchiv Dezember 2013, Bank Verlag, ViennaGoogle Scholar
  9. NASA (2017) Accessed 20 Feb 2017
  10. Porter ME (1990) The competitive advantage of nations. Free Press, New YorkCrossRefGoogle Scholar
  11. Porter M, Kramer M (2003) The competitive advantage of corporate philanthropy. In: Harvard business review on corporate responsibility. Harvard Business School Publishing Corporation, Boston, pp 27–64Google Scholar
  12. Scherer FM (1986) Innovation and growth. Schumpeterian perspective. The MIT Press, Cambridge, MAGoogle Scholar
  13. Smith D (2012) The state of the world atlas, 9th edn. Penguin Books, New YorkGoogle Scholar
  14. SPTF (2016) Social performance task force. Accessed 17 Dec 2016
  15. Stiglitz J, Sen A, Fitoussi JP (2010) Mis-measuring our lives. The New Press, New YorkGoogle Scholar
  16. Sukhdev P (2012) Corporation 2020. Island Press, Washington, DCGoogle Scholar
  17. Serafeim G et al (2015) Corporate sustainability: first evidence on materiality. Harvard Business School Working Paper Number: 15–073Google Scholar
  18. Sustainability Accounting Standards Board (2016) Standards. Accessed 11 Oct 2016
  19. Toyota (2017) Sustainability. Accessed 18 Jan 2017
  20. Unilever (2017) Sustainable living. Accessed 20 Jan 2017
  21. United Nations (2015) United Nations Department for Economic and Social Affairs, World Population Prospects, United nations, New YorkGoogle Scholar
  22. United Nations Development Programme (2016) Human Development Report. Accessed between 1 Sept 2016 and 30 Nov 2016
  23. United Nations (1987) Report of the World Commission on Environment and Development: our common future. Accessed 30 June 2016
  24. UNPRI (2016) United Nations Principles for Responsible Investment. Accessed 17 Dec 2016
  25. Worldbank (2017) Data. Accessed on 1 Feb 2017
  26. WWF (2012) Living planet report 2012. WWF Gland, GlandGoogle Scholar

Authors and Affiliations

  1. 1.European Investment BankLuxembourg CityLuxembourg
  2. 2.INSEADLuxembourgLuxembourg
  3. 3.SciencesPolitiquesParisFrance
  4. 4.Welch College of BusinessSacred Heart UniversityFairfieldUSA

Personalised recommendations