See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/377413221

Eco-Innovation, A New Business Profitability Strategy for Environmental

Sustainability

Article in Innovations · January 2024

CITATIONS READS

0 61

2 authors, including:

Ernest Jebolise Chukwuka

UNIVERSITY OF DELTA, AGBOR
17 PUBLICATIONS 11 CITATIONS

SEE PROFILE

All content following this page was uploaded by Ernest Jebolise Chukwuka on 16 January 2024.

The user has requested enhancement of the downloaded file.

 Innovations, Number 75 December 2023

Innovations

Eco-Innovation, A New Business Profitability Strategy for Environmental

Sustainability
1
Ernest Jebolise Chukwuka (PhD) & 2Imide Israel Onokero (PhD)
1
Department of Entrepreneurship and Business Innovation, University of Delta,
Agbor, Delta State Nigeria
2
Department of Economics, University of Delta, Agbor, Delta State Nigeria

Abstract
This paper presents an empirical investigation into an emerging field of study which seeks to ascertain the nature of
relationship or influence of eco-innovation on environmental sustainability, business profitability and viability. The failure
of market-based tools and government command and control systems to prevent harmful environmental externalities and the
undervaluation of natural resources due to the actions of profit-driven entrepreneurs leading to overexploitation and
depletion as well as climate change make this study necessary and in high demand. This study adopted the descriptive
survey design which allows for the collection of original data from the respondents of selected firms. The study discovered
that eco-innovation significantly and favorably influences the profitability and viability of businesses studied and also has a
positive and significant influence on environmental sustainability. The study also concludes that organizational practices of
eco-innovation have led to high degree of customer’s loyalty to firm’s product and sustainability of the environment. The
study concludes that Eco-innovation generates new technologies in product manufacturing and redesigns through eco-
innovation practices and principles. The study also concludes by revealing that Eco-innovation generates new ideas and
process that’s positively associated with customer’s satisfaction.

Keywords: Eco-innovation, Profitability, Environmental Sustainability, Business viability, Business Strategy

Introduction
The world with regards to environmental sustainability is in urgent need for eco-innovation because the globe
can no longer sustain the amount of natural resources that mankind utilizes today. According to Steffen,
Broadgate, Deutsch, Gaffney, and Ludwig (2015), the earth's bio-capacity which includes the extraction and
absorption capacity for waste and emissions has already been surpassed by around 50%. The "Earth Overshoot
Day" of 2015 happened on August 13, which indicates that in just 8 months, humanity had used up all of the
natural resources for a full year. According to scientific calculations, "Earth Overshooting Day" fell on August
2nd, 2017, indicating that humanity has used more ecological resources and services than nature can replenish
for us through overharvesting the forests, overfishing, and emitting more CO2 emissions than the plants can
absorb, moving the date by 11 days and demonstrating that it is possible to reduce the human impact on the
environment. The population of the planet has increased dramatically since 1950, as have all societal and
economic activities. A dashboard of 24 indicators, created by the Stockholm Resilience Center and

474 www.journal-innovations.com
 Innovations, Number 75 December 2023

International Geosphere-Biosphere Programme (2022), shows how human activity has dramatically increased
and how it has affected the Earth system over the past 200 years. In a single human lifetime, trends have
accelerated synchronously from the 1950s to the present with little prospect of slowing down. The Great
Acceleration refers to these patterns. Strong evidence that the Earth system has changed states may be found in
12 socioeconomic and 12 Earth system patterns from 1750 to the present. The development of major
economies throughout the world led to increasing income, a greater desire for purchase, and changes in
consumer behavior. The two sets of data are therefore linked, and it is obvious that the development of
socioeconomic trends has an impact on the earth indicators. Changes in the Earth's natural systems, such as
climate (greenhouse gas levels, global temperature), ocean acidification, terrestrial biosphere degradation, and
fish capture, reflect changes in human production and consumption, as measured by GDP, direct foreign
investment, energy consumption, transportation, paper or fertilizer use, etc. (Steffen, Broadgate, Deutsch,
Gaffney & Ludwig, 2015). More research in recent years have shown how human and economic activity have
an unparalleled influence. According to the Millennium Ecosystem Assessment Synthesis Report, 60% of the
benefits provided by global ecosystems to support life on Earth (such as fresh water, clean air, and a reasonably
stable climate) are being degraded or used in an unsustainable manner. Economic development is said to come
at a price of unprecedented material consumption and impact pollution. Maintaining the status quo may have
unheard-of effects on the environment, the economy, and wellbeing. Recent sustainability issues (climate
change, resource depletion, environmental degradation, and worker welfare) are motivating businesses to
modify how they do business. Companies won't be able to adapt to problems like growing resource costs,
disruptions in the supply of their raw materials, or legislative changes if they continue with business as usual.
Furthermore, the OECD has previously assessed that inactivity has a high cost to the economy, society, and
the environment, whereas using tried-and-true improvement strategies is predicted to have a 3 trillion USD
economic gain (McKinsey, 2011). As a result, there is an increasing need to identify alternative strategies that
may address the sustainability of organizations and goods while also providing potential for development, cost
reduction, and competitive advantage (Deutsch, Gaffney, Broadgate, Steffen, & Luthier, 2015. From this
vantage point, it is commonly accepted that innovation is a driver of corporate success and competitive
advantage at the company level, as well as a driver of economic and social advancement in any country. By
encouraging technologies that are solving the present and future environmental concerns, reducing energy and
resource use, and fostering sustained economic activity, we may move toward a more environmentally sound
and affluent society. Eco-innovation is the term used to describe this kind of innovation.
The main objective of this study is to investigate and ascertain the nature of relationship or effect of eco-
innovation on environmental sustainability, business profitability and viability.

Review of related Literature

2.0 Conceptual Review of Eco - Innovation
Eco-innovation is the creation and implementation of a business model that integrates sustainability into all
company activities, based on life cycle thinking and in collaboration with partners from all points along the
value chain in order to improve a company's performance and competitiveness, it involves a coordinated set of
changes or creative solutions to its products (goods and services), processes, marketing strategy, and
organizational structure (UNEP 2019). Eco-innovation is also the term used to describe practices that increase
resource efficiency and divorce economic progress from environmental degradation or deterioration which
ensures that over the course of a product's life cycle, it attempts to do more and better with less resources
(Chukwuka 2018). Eco-innovation is fundamentally about lessening the reliance on resources in goods and
services while also developing new business models that are competitive, considerate of the environment, and
profitable across the whole value chain (Chukwuka & Eboh 2018). Scholars have characterized eco-innovation

475 www.journal-innovations.com
 Innovations, Number 75 December 2023

with a range of restrictions and degrees of potential. For instance, the OECD (2009) defines eco-innovation as
"any innovation that would result in reduced environmental impact, even if such an outcome was not initially
intended." While this definition is practical, it portrays eco-innovation as more of a byproduct and downplays
its viability as a substitute for business as usual. Europeia (2007) defines eco-innovation as "any form of
innovation aiming at significant and demonstrable progress towards the goal of sustainable development,
through reducing impacts on the environment or achieving a more efficient and responsible use of natural
resources, including energy" on the other hand, highlighting its environmental output as the primary goal.
There are numerous prospects for eco-innovation, from zero-waste cities, smart infrastructures, or better
managing ecosystems and lifestyles, to low-carbon solutions for diverse economic sectors, green goods, and
green business models (Doranova, Miedzinski, and Van der Veen 2012). A variety of instances of eco-
innovation that has been effectively implemented, focusing on companies, processes or goods (e.g., Xerox
managed print services), organizations and marketing tactics (e.g., Vélib bike sharing in Paris), or institutions.
These instances demonstrate unequivocally that what is good for the environment is also good for business,
and they serve as an example for other businesses and organizations to adopt environmentally friendly
practices. Eco-innovation relies on a variety of methods, including changes to processes or straightforward
product modifications, as well as the redesign of goods using ecological principles, the use of substitutes, and
the development of new business and marketing models. The amount of intervention is heavily influenced by
the firms' awareness, resources, and dedication, as well as their strategy (OECD,2009)
Rennings (2000), cited in Chukwuka (2018) suggests that the distinctive feature of eco-innovation as compared
to innovation in general is a concern about the direction and content of progress. In particular there have been
concerns about whether innovation leads to the mitigation or resolution of an environmental problem. The
“Innovation Impacts of Environmental Policy Instruments” - project introduced the term environmental
innovation and defined it very broadly: “Eco-innovations are all measures of relevant actors (firms, politicians,
unions, associations, churches, private households) which; develop new processes, products, behaviour and
ideas, introduce or apply them, and which contribute to reducing the environmental burdens or to ecologically
specified sustainability targets”.
Eco-innovation can result in changes or creative answers to a business's products, services, operations,
marketing strategy, and organizational design. Enhancing a company's performance and competitiveness is the
final consequence of eco-innovation. However, these actions take occur within the context of the company's
long-term strategic push towards fundamental change. Actual transformation is likely to be achieved by
applying the aspects of the new strategy on a steady, progressive, and targeted basis. Businesses add value for
the company, the environment, and society at large by adopting eco-innovation (UNEP 2020).
Geissdoerfer et al. (2018) argue that through targeted interventions to enhance processes and products, eco-
innovation will frequently build on past efforts made by a corporation to become more sustainable. Many of
these initiatives have centered on improving the resource and energy efficiency of the company's operations or
end products utilizing techniques like RECP (Resource Efficiency and Cleaner Production). The goal of
becoming sustainable throughout the life cycle can be made into a core component of a company's business
strategy and mainstreamed into all of its operations through its business models, but this alone won't help a
company achieve true sustainability. Eco-innovation is a component of a larger movement that aims to get
companies to embrace new, more sustainable business models (SBMs), which are frameworks for bringing
about systemic change in favor of sustainability in organizations. These endeavors all have things in common.
They put sustainability (in its environmental, social, and economic components) at the center of a company's
strategy. They necessitate proactive interaction between the business and all of its stakeholders (including the
environment and society as a whole) through a controlled process in order to pinpoint areas of sustainability

476 www.journal-innovations.com
 Innovations, Number 75 December 2023

that might use improvement. With these upgrades, they want to build long-term value for the network of
stakeholders along the value chain (Geissdoerfer et al 2018).

2.1 Importance of Eco-innovation to Business

When attempting to make your company more sustainable, it's natural to concentrate on the effects of your
own operations. However, what you do can also have an influence on your suppliers or clients, either
positively or negatively. Eco-innovation is a method that enables you to create and diversify sustainable
business models that lessen your negative social and environmental effects as well as those throughout your
value chain, enhancing your competitiveness and resilience. By embracing three criteria, eco-innovation
enables you to assess the total sustainability of the value chain of your company: Eco-innovation may aid
SMEs in gaining access to developing markets, increasing productivity, luring new capital into the company,
boosting profitability throughout the value chain, and staying ahead of rules and standards (UNEP 2020).

2.2 The implementation of eco-innovation must begin with a change in the business strategy

The incorporation of sustainability into the company's business strategy must be a deliberate choice. Once the
choice has been taken to begin the arduous process of implementing sustainability, this plan must trickle down
from the strategic level into the business model (UNEP 2019). Changes at the operational level (including the
company's goods, customer segments, channels, and customer connections, revenue streams, manufacturing
processes, important activities, partners, and cost structure) are then made possible by changes at the business
model level. Therefore, eco-innovation is essentially a "top-down" process that starts with a shift in corporate
strategy (Geissdoerfer et al 2018).

2.3 Eco-innovation requires a holistic approach

Eco-innovation must be comprehensive in its consideration of every stage of the product life cycle, from the
extraction of raw materials through the disposal of waste at the end of its useful life. This will ensure that time
and energy spent on eco-innovation contributes to making significant progress against the main threats faced
by the industry and does not simply transfer issues from one value chain partner, phase of the life cycle, or
problem category to another (UNEP 2014).

2.4 Eco-innovation requires co-operation across the value chain

The complete series of actions or parties that deliver or receive value in the form of goods or services is referred
to as the "value chain" (ISO14001:2015). Examples of these parties or activities include suppliers, contractors,
investors, R&D, customers, consumers, and members. A corporation that wishes to adopt the life cycle
viewpoint previously stated must also take into account the other players in the value chain as the value chain
runs concurrently with the life cycle of the product. By enabling action to be made in the portions of the value
chain that have the most influence on sustainability challenges, collaboration with other key players in the
value chain can assist to optimize the impact of a company's eco-innovation initiatives (UNEP 2014).

If working alone, it could be challenging to gain access to, comprehend, and act in these crucial parts of the
value chain. A key aspect of the difficulty of eco-innovation is launching these partnerships across the value

477 www.journal-innovations.com
 Innovations, Number 75 December 2023

chain, which calls for the creation of new kinds of interactions between suppliers, manufacturers, distributors,
customers, and recyclers, for instance.

2.5 Eco-innovation should consider all three aspects of sustainability: economic, social and environmental

This is significant because, up until now, the majority of businesses have only paid attention to the financial
gains generated by their operations. Companies must also try to provide social benefits for customers,
employees, and stakeholders (e.g., improved gender equality, job creation, better pay and working conditions,
more equitable profit distribution along the value chain, etc.) in addition to reducing the environmental
impacts of their products. For the majority of businesses, these are fresh difficulties, but they must be
overcome if the business is to have a successful, long-term future and contribute to the creation of a sustainable
society. How businesses might obtain a competitive edge while providing this societal contribution is
explained in the next subsection.

2.6 Why Do Companies Need to Eco-Innovate?

Manufacturing industry executives are increasingly aware that sustainability risks including climate change,
worker welfare, and resource shortages are significantly affecting how manufacturing organizations conduct
business. These sustainability threats act as motivators for changing how businesses run. Companies won't be
able to adapt to problems like rising energy prices, disruptions in the supply of their raw materials, or
legislative changes if they continue with "business as usual." Companies who do not act now are ultimately
more likely to fail when these concerns inevitably affect their sector (UNEP 2020). Therefore, there is an
increasing need to identify alternative strategies that may satisfy business drivers connected to sustainability
while also providing chances for expansion, cost savings, and competitive advantage. By identifying the key
sustainability threats and opportunities and using them to drive changes across the company and its value
chain, from the business strategy and business model to the operational level, eco-innovation is an approach
that seeks to satisfy these various requirements. Understanding the business case for action from the standpoint
of the organization is crucial before developing eco-innovation implementation services. Numerous ways in
which eco-innovation may generate value for a company have been highlighted by the experiences of
businesses that have successfully adopted eco-innovation (Chukwuka et al., 2018).
Therefore, there is an increasing need to identify alternative strategies that may satisfy business drivers
connected to sustainability while also providing chances for expansion, cost savings, and competitive
advantage. By identifying the key sustainability threats and opportunities and using them to drive changes
across the company and its value chain, from the business strategy and business model to the operational level,
eco-innovation is an approach that seeks to satisfy these various requirements. Understanding the business
case for action from the standpoint of the organization is crucial before developing eco-innovation
implementation services. Numerous ways in which eco-innovation may generate value for a company have
been highlighted by the experiences of businesses that have successfully adopted eco-innovation.

478 www.journal-innovations.com
 Innovations, Number 75 December 2023

Figure 1: Added value derived from eco-innovation or Eco-innovation Drivers.

Source: United Nations Environment programme (UNEP) (2020)

 Increase profitability along the value chain

In order to boost profitability along the value chain, industrial methods may be changed to decrease significant
impacts and products can be designed to make it simpler to recover and reuse resources.

 Stay ahead of standards and regulations

It's common to think of complying with environmental laws as a pricey but essential endeavor. On the other
hand, it may also be a source of competitive advantage if, for example, regulatory changes result in fresh
market possibilities that are only seen by top organizations. If the business adopts a leadership position and is
successful in persuading legislators to propose legislation that is consistent with their own best practices, the
advantage of this strategy may be leveraged.

 Attract investments
It might be challenging for large businesses undertaking eco-innovation to locate partners or suppliers who can
significantly advance their sustainability initiatives. Small businesses who have demonstrated their ability to
eco-innovate might thereby entice funding from these huge corporations to support scaling up manufacturing,
enhancing product quality, etc. If the business is able to demonstrate major sustainability advantages as part of
a financing request, public funds and grants may also be simpler to get.

 Increase productivity and technical capacity

Employees prefer to work for organizations that they perceive to be sustainable and ecologically responsible. A
company can more easily attract and keep a skilled and motivated workforce, which will increase productivity
and product quality, if it positions itself as a leader in areas like gender equality, employee welfare,

479 www.journal-innovations.com
 Innovations, Number 75 December 2023

environmental performance, and corporate social responsibility. Additionally, eco-innovation frequently calls
for new abilities and skills. Due to the nature of eco-innovation, it affects all aspect of a firm, from strategy and
business model to operational tasks like design, production, buying, and marketing. Eco-innovation will
typically need a change in how businesses operate. Eco-innovation needs to eventually integrate itself into the
company's culture and operational procedures if it is to be effective. For individuals engaged, this kind of
transformational change may be thrilling and fulfilling, but it cannot be completed fast or simply. To adopt
eco-innovation, a corporation will need to make a large investment of time, money, and effort over an
extended period of time. Obtaining this kind of dedication might be difficult (UN Environment, 2014).

 Access to new and expanding markets

Businesses that eco-innovate have a lot of new market potential. These might be access to markets that have
strict sustainable procurement regulations and standards, completely new, emerging markets, or portions of
current markets with a keen interest in sustainability.

Rennings, (2000) cited in Chukwuka (2018) believe that one way of measuring the reduction in environmental
impact achieved by an eco-innovation is by stating the so-called factor X reduction in resource use. The factor
4 and factor 10 concepts originate in the Wuppertal Institute and are promoted by Von Weizsäcker and others
as creative ways to reduce the resource intensity of economic activity (Halila and Hörte, 2006). Factor
reduction refers to the idea of reducing the resource use per unit of service or product by a certain factor and
can be achieved through a combination of technological, financial and lifestyle changes. It is vital to point out
here, that the idea behind factor X reduction is that the actual environmental effect of innovation rather than
the intention behind the innovation determines if a change is environmental”.

2.7 Key success factors to boost eco-innovation in Nigeria

The establishment of favorable conditions based on two levels of interventions, market-based instruments and
targeted science, technology, and innovation policy is necessary for the formation of systemic eco-innovation
at the national level. At the national level, having a defined strategy and goals for addressing societal concerns
(eco-innovation macro-indicators) as well as vigorously promoting sustainable consumption and production
practices are prerequisites. Additionally, the overall environment (amount of gaps, ease of doing business, ease
of invention) is crucial in fostering both innovation and eco-innovation. (Dries et al. 2005, published in OECD
(2005b). In most countries, the trade, industry, and science and technology ministries have been in charge of
innovation policy, while the environment protection ministries have been in charge of environmental policy,
with little effort being made to integrate these two policy domains, according to the OECD Synthesis Study on
Framework, Practices, and Measurement of the Sustainable Manufacturing practices. While environmental
policies often concentrate on "end of pipe solutions" rather than pollution prevention measures or a longer-
term supply chain emphasis, the innovation strategy is typically too broad to adequately address particular
environmental challenges. Despite the recent introduction of a few market-oriented tools, such green fees and
tradable licenses, there hasn't been much of a shift. Eco-innovation will need to take steps to guarantee that the
whole innovation cycle is effective in order to reach its full potential. These steps might include policies that
encourage the commercialization of both established and ground-breaking technology as well as appropriate
funding in research. (OECD, 2009)
A greater convergence of environmental and innovation policies would be advantageous. At the market level,
a combination of market-based tools can be developed for eco-innovation, including supply-side tools (equity

480 www.journal-innovations.com
 Innovations, Number 75 December 2023

support, research and development (R&D), education and training, networks and partnerships, and provision
of infrastructure) and demand-side tools (regulations and standards, public procurement and demand support,
technology transfer).

2.8. Environmental Commitment (Eco-Commitment)

Commitment generally, is the willingness to work hard and give your energy and time to a job or an activity.
(Motivation, Vision, and Commitment), the vision an entrepreneur follows may be influenced by different
factors. These factors are also the case for the ecopreneur’s vision, and because the ecopreneur follows an
ecopreneur vision, it is preceded by one, or a mixture of three forms of environmental commitment: affective
commitment, continuance commitment and normative commitment”. Keogh and Polonsky (1998) cited in
Chukwuka (2018) modify the model of organisational commitment proposed by Meyer and Allen (1991) and
its three dimensions of engagement stated above, so that it becomes a commitment to the environment, and
then apply it to entrepreneurship. If not correctly pointed out, commitment to the environment may appear
like commitment to an idea or issue. Keogh and Polonsky (1998) argue that the commitment to ideas is
problematic, not least because it is not very well researched. They propose instead that the environment is
regarded as an entity, not only a physical entity, but also an entity made up of the various forces that aim to
bring it on the company agenda, like regulations, market forces and internal forces. Both individuals and
organisations can display commitment in this model.
Affective commitment is an emotional attachment to the environment, something that makes the
consideration of environmental concerns and the achieving of environmental goals an end in itself. This is the
strongest form of environmental commitment, and an ecopreneur operating under affective commitment to the
environment will always strive for the most environmentally friendly solution possible. This will not only lead
to more radical eco-innovations, but it will also result in exploiting eco-opportunities that others don’t see or
perceive as marginal or uninteresting (Keogh and Polonsky 1998).
Continuance commitment is concerned with the economic and social cost of disregarding environmental
concerns, or what economists call opportunity cost. Someone operating under continuance commitment
strongly respects social and economic norms, and will, therefore, direct efforts to pursue eco-opportunities
which are socially but also economically “acceptable”. Since this approach aims to minimise tangible and
intangible cost, as in the form of a tarnished public image, to the company, which may be arising from
disregarding environmental concerns, the eco-opportunities. It exploits, and the eco-innovations it delivers will
be more limited in scope than those of the ecopreneur operating under affective commitment (Keogh and
Polonsky, 1998).
Normative commitment means that the person guided by it will respond to a feeling of obligation or
indebtedness. This deficit may be caused by external influences, such as environmental protection laws, or by
the individual identifying obligations to the environment. One key feature of this form of commitment is that
the people and organisations guided by it, will exploit eco-opportunities and produce eco-innovation only to
the point their feeling of indebtedness warrants them to, and limit consideration for the environment that goes
beyond that point. When environmental legislation or rules cause the sense of indebtedness, this leads to the
ecopreneur only fulfilling the bare minimum requirements, and this form of commitment may then be
regarded as weakest (Keogh and Polonsky, 1998).

2.9 Eco-Opportunity
When economic activity creates environmental degradation or social damage, economists have sought to
attribute this fact to market failures. Entrepreneurship theory often identifies inherent opportunities in market
failures, for entrepreneurs to exploit and thereby accrue entrepreneurial rents. Dean and McMullen (2005)

481 www.journal-innovations.com
 Innovations, Number 75 December 2023

cited in Kainrath (2009), identify a list of environmentally relevant (i.e. damaging) market breakdowns,
explain how they may cause environmental degradation, and suggests how ecopreneurs may remedy them and
mitigate the environmental degradation, thereby exploiting environmental (eco-)opportunities. Based on how
the different eco-opportunities are exploited, Dean and McMullen (2005) develop a theory of environmental
entrepreneurship. The following market failures are proposed as possible sources of eco-opportunity: public
goods, externalities, monopoly power, inappropriate government intervention, and imperfect information. The
authors themselves state that the list of identified market failures may not be complete, and may be amended
by other authors. They also admit that not all market failures, even if environmentally relevant, necessarily
constitute eco-opportunities (Dean and McMullen, 2005). Market failure is defined as: “the failure of a more
or less idealised system of prize-market institutions to sustain desirable activities or to discontinue undesirable
activities”. (Dean and McMullen, 2005) An eco-opportunity is supposed to be an environmentally relevant
market breakdown, which if given a cost-effective solution, people would pay for to have it removed. By
exploiting this eco-opportunity, the ecopreneur not only achieves entrepreneurial rents but also alleviates an
environmental burden (Dean and McMullen, 2005). Environmentally friendly products or services may be
directly beneficial to the environment, or at least be less harmful impact than their non-environmentally
friendly alternatives (Pastakia, 1998). An ecopreneurs rent arises from the exploitation of an eco-opportunity.
It accrues to the ecopreneur who first seizes a new opportunity, which because of the lack of competition
generates above-average returns (Dean and McMullen, 2005).

2.10 Theoretical Review

Ecological Modernization Theory
This theory was used in this study as a framework for the investigation. These individuals support the
ecological modernization theory, which also offers an economic justification for environmental entrepreneurs
(Hajer, 1995; Mol, 1995). The theory is that by giving the environment more importance, economic growth
may be stimulated. It is no longer essential to compromise between environmental quality and economic
progress (Tillery and Young, 2009). The ability of the capitalism economy to create long-term remedies for
environmental issues is widely acknowledged. It is possible to enhance the environment by utilizing the
innovative spirit of capitalism (Beveridge and Gug, 2005). According to the ecological modernization theory,
"the environmental problems facing the world today, act as a driving force for future industrial activity and
economic development" (Murphy, 2000, p. According to the progressive modernization theory (Gibbs, 2009;
Mol and Spaargaren, 1993; Tillery and Young 2009), entrepreneurs are the main agents of change in the
process of transformation to avert an ecological disaster because this new generation of ecopreneurs seeks to
combine environmental consciousness and traditional entrepreneurial activity to achieve economic success,
entrepreneurial action is thus the greatest answer to our environmental challenges (1998, Anderson). In the
overall shift to a more sustainable business model, ecopreneurs have the potential to play a significant role
(Schaper, 2002).

The justification for using this theory is that ecological modernization theorist believes that “the environmental
problems facing the world today, act as a driving force for future industrial activity and economic
development” The theory also believe that it is possible to promote economic growth by giving higher priority
to the environment. It is no longer necessary to trade off economic growth for environmental quality. This
theory has served as a morale booster for ecopreneurs. This theory has given credence to the study of eco-
innovation.

482 www.journal-innovations.com
 Innovations, Number 75 December 2023

2.10.1 Other Views Expressed Along the Lines of Eco-Innovation Study

(a) ) Klimova and Zlek, (2011) Views on Ecological Sustainability
According to Klimova and Zlek (2011), ecopreneurship is crucial because in the future, eco-innovations will
give businesses and nations a competitive edge. They contend that new and innovative environmental
technologies, services, and processes will be the more significant sources of competitive advantage and that if
businesses and nations want to succeed in the global market, they cannot rely on having low costs as their
competitive advantage. Our economic system's long-term viability depends not only on quantitative growth
but also on ecological sustainability and development (Klimova and Zitek, 2011). Additionally, there are also
sound commercial justifications for the necessity for eco-innovation in order to address our environmental
issues. First, there is a finite amount of our resources, such as fish, minerals, or gas. If we do not sustain them,
many of them once used out cannot be replenished, leaving us with decreasing or no national resources.
Also, because of economic activity and consumption, most of our resources become waste. As a result, we
have the problem of pollution, which seriously affect humans and the ecosystem and lead to greenhouse gas
accumulation and potential climate change (Volery, 200, p. 542). To sustain them, ecopreneurship is
important to constantly look for alternatives, e.g. recycling or new sources of energy, such as wind, water, and
solar (Arber and speech, 1992: Barnes, 1994). Second, the global population growth is also influencing
ecopreneurship. The world population is expected to increase by 50% by 2050 and with it will come an
increase in consumption (World Business Council for Sustainable Development 2002). Although part of thus
consumption is important for relieving poverty in many emerging countries, most it will be done by affluent
consumers, and can have negative impact on the ecosystems (Volery, 2002, p. 542). Eco-innovation is
therefore important to find the new technologies to protect the environment and to ensure that there are
enough resources to fill the needs of both the current population and future generations (Volery, 20012).

Thirdly biodiversity loss also justified entrepreneurship action to solve environmental problems. Volery
(2002), posit that “the rates of takeover of wild life habitat, and of species extinction are the fastest they have
ever been in human history and are accelerating. Goodland (1991) also reported that the tropical forest, the
world’s richest species habitat has already been 55% destroyed and the loss in containing. Given the need for
environment sustainability, there is need for a new kind of entrepreneur who will incorporate environmental
concerns into the consideration of their bottom-line (Volerny 2002).

2.11 Empirical Review

This section encapsulates an empirical evidence of related study done elsewhere discovered through literature
review with their methods and findings.
Chukwuka et al., (2018) discovered in their study of Sustainability-Oriented Practices of Eco-Innovation, Eco-
Commitment and Organizational Performance of a Developing Economy that Eco-innovation was empirically
found to have positive effect on the market share of selected manufacturing firms in a developing economy.
They concluded that the implementation of green business practices, principles and processes will lead to very
positive outcome that will be visibly manifested in the organization and the environment. The technique for
the study's survey design was used. The ten manufacturing companies in Nigeria were chosen using a
straightforward random selection approach. Using the Cochran (1977) statistical technique, a sample size of
543 respondents was picked from a population of 5705 people from the management, middle, and lower cadre
of the chosen manufacturing enterprises. To assess the proportional distribution of the questionnaire to the
management cadre, middle cadre, and lower cadre, a stratified sample approach was also utilized. For
gathering primary data, a designed questionnaire and in-person interviews were utilized. The survey was
formatted using a 5-point Likert scale. Utilizing content validity, the instrument's validity was determined.

483 www.journal-innovations.com
 Innovations, Number 75 December 2023

Using the test-retest approach, the instrument's reliability was evaluated, and the result was 0.90, indicating
consistency in the survey's items. Utilizing linear regression analysis, the data were analyzed and the
hypotheses were evaluated. The 5% level of significance for probability was used. Simple percentages were
used to show the data.

Nollman (2013) looked at how sustainability measures affected workplace efficiency and worker output. The
researcher set out to address the issue of workplace sustainability efforts and worker productivity. Peer review
of an academic journal database employing performance metrics and sustainability in the workplace was the
approach employed to reach his conclusion. The study found that switching from non-sustainable to
sustainable workplaces resulted in an average improvement in employee satisfaction and workplace
productivity of 21.4%. Scores on the satisfaction scale varied from 1.30 to 2.36, with an average of 1.86.

The impact of business environmental sustainability on economic performance and profitability was examined
by Russo and Fouts (2014). They set out to address the issue of the connections between business
environmental sustainability, financial success, and economic performance. Survey design was the approach
utilized, which involved gathering data from a survey and testing hypotheses through an analysis of 243 firms
over a two-year period using independently created environmental evaluations. The findings show that "going
green pays off," and that this association gets stronger as the business expands. They highlighted the study's
managerial and academic implications in their conclusion, paying particular attention to the social challenges
discussed in management literature. The study's conclusion was that environmental sustainability, economic
performance, and profitability are all positively correlated, and that industry expansion moderates this
relationship, with environmental performance rewards being larger in high-growth businesses.

2.12 Knowledge Gap or Gap in Literature

A comprehensive review of related literature has revealed that this field of Eco-innovation and Business with
regards to environmental sustainability is still in infancy with paucity of literature. Therefore, the failure of
market-based tools and government command and control systems to prevent harmful environmental
externalities and the undervaluation of natural resources due to the actions of profit-driven entrepreneurs
leading to overexploitation and depletion make this study necessary and in high demand as well as a solution
to the challenges of environmental sustainability. This study will raise the frontiers of knowledge in the
emerging field of study. This is also a leading study in this emerging field in sub-Saharan Africa where climate
change is a reality like other parts of the world.

3.0 Methodology
This study adopted the descriptive survey design which allows for the collection of original data from the
respondents, describes the present situation and problems in their natural setting and permits a sample
representing the population to be drawn. This research design is considered most suitable for the study because
it was well suited to the description and correlative nature of eco-innovation study, the questionnaire and oral
interview collected quantitative and qualitative data of 543 employees of the selected firms in Nigeria (
Management cadre, middle cadre and lower cadre) with rich eco-innovation profiles were randomly selected.
Out of the 543 questionnaires distribute, 528 were returned valid and 15 questionnaires were discarded for
incomplete information. The data collected were useful in measuring the eco-innovation variables and testing
the specified hypotheses of the study, most of the data generated from the questionnaire survey were ordinal in
nature (responses were mainly ratings measured on the Likert scale).

484 www.journal-innovations.com
 Innovations, Number 75 December 2023

4.0 Discussion and Result

A total of five hundred and forty three questionnaires were distributed to the randomly selected eco-
innovation profiled firms in Nigeria. A total of five hundred and twenty eight were returned completed.
Fifteen copies were invalidated for incomplete information.

Analysis of Data
Table 4.1: Table of Response Ratio: Management Structure
Respondents Number Number % Return Number %
Distribution Returned Unreturned Unreturned
Management 50 45 90 6
Cadre
Middle cadre 183 180 98.36 4
Lower cadre 307 303 98.70 5
Total 543 528 97.78 15
Source: Field Survey, 2023.

Table 4.2: Age Distribution of the Respondents

Age No of response Percentages (%)

18- 24 50 9.5
25-35 170 32.2
36-44 280 53
57 and above 28 53
Total 528 100
Source: Field Survey, 2023.

Table 4.2 shows the age distribution of the respondents. 50(9.5%) are below 25 years while 170(32.2%) are
between 25-35 years of age and 280(53.0%) are within the age bracket 36-44 and 28(53.0%) are 57 years and
above.

Table 4.3: Educational Qualification of the Respondents

Educational Background Number of Respondents Percentage
O’ level 65 12.3
OND/NCE 170 32.2
HND/BSc, BA 240 45.5
MA/M.Sc /MBA 50 9.5
Above masters 3 0.57
Total 528 100
Source: Field Survey, 2023.

According to the study's findings, 65 (12.3%) of the participants have an O' level, while 170 (32.2%)
have an OND or NCE and 240 (45.5%) have an HND or a BSc or BA. While just 3 (.5%) have a
master's degree or above, 50 (9.5%) have an MA, M.Sc., or MBA. By applying Bowley's proportional

485 www.journal-innovations.com
 Innovations, Number 75 December 2023

allocation statistical approach, the sample size for each stratum is determined using Table 4.1, the
table of response ratio, and the management structure profile. Table 4.2, "Age Distribution of the
Respondents," relates to and is pertinent to this study in determining if the questionnaire is distributed
fairly across the population's age range. The degree of comprehension of respondents to eco-
innovation ideas reflected in the questions included in the questionnaire and oral interview may be
determined by looking at Table 4.3: Educational Qualification Profile of the Respondents, which is
connected and relevant to this study.

Table 4.6: Eco-innovation effect on business profitability and environmental Sustainability

Statement of variables SA A U D SD Mean St.d
Eco-innovation is 150(28.41) 265(50.2) 55(10.4%) 30(5.7) 28(5.3) 3.9 .25
practiced and implemented
in your firm.
Eco-innovativeness to a 285(54.0) 192(36.3) 13(2.5) 20(3.79) 18(3.4) 4.3 .23
greater degree affects
positively your firm’s
profitability.
Management and 180(43.1) 190(35.9) 50(9.5) 70(13.3) 38(7.2) 3.7 .26
workforce practicing of
eco-innovation have led to
high degree of customer’s
loyalty to your firm’s
product and sustainability
of the environment.
Eco-innovation generates 306(58.0) 58(10.9) 34(6.4) 100(18.9) 30(5.7) 1.4 .74
new ideas and process
that’s positively associated
with customer’s
satisfaction.
Eco-innovation generates 188(35.6) 295(55.9) 10(1.89) 18(3.4) 13(2.5) 4.2 .24
new technologies in
product manufacturing.
Source: Field Survey, 2023.

Table 4.6 displays the participants' opinions on how eco-innovation affects the profitability of the chosen
manufacturing companies. According to the results, 150 participants (28.41%) strongly agreed that eco-
innovative practices are used and implemented, whereas 265 people (50.2%) agreed and 55 participants
(10.42%) were unsure. 30 people (5.7%) disagreed, while 28 people (5.3%) severely disagreed. The practice of
eco-innovation is consequently implied to be fully adopted based on the mean and standard deviation being
3.9 +.25.
Additionally, the study's findings indicate that 285 (54.0%) of the participants strongly agreed that eco-
innovation significantly impacts your company's profitability. 13 people (2.5%), out of 192 (36.3%), are
unsure. Up to 20 (3.79%) and 18 (3.4%) disagreed, respectively. According to the mean and standard deviation
of 4.3 +.23, the eco-innovation increases the profitability of your company. Additionally, the results showed
that Management and workforce involvement in eco-innovation has increased consumer loyalty to your

486 www.journal-innovations.com
 Innovations, Number 75 December 2023

company's product by a mean and standard deviation of (3.7 +.26). This conclusion is based on 180 (43.1%),
190 (35.9%), and 50 (9.5%) strongly concurring that management and employee involvement in eco-
innovation has increased consumer loyalty to your company's products. Only around 70 (13.3%), 38 (7.2%),
and respectively 38 disagreed and strongly disagreed.
The study's findings show that a company's eco-innovation provides fresh concepts and methods that are
favorably correlated with customer satisfaction using a mean and standard deviation of (1.4 +.74). In light of
this, 306 (58.0%) strongly agreed that a company's eco-innovativeness produces fresh ideas and methods that
are favorably related to customer happiness, 58 (10.9%) agreed, and 34 (6.4%) were unsure. In contrast, 30
(5.7%) strongly disagreed whereas 100 (18.9%) disagreed.

The study's final finding reveals that 188 (35.6%) of the participants strongly agreed that eco-innovation creates
new technologies for product manufacture. While 10 (1.89%) are unsure and 295 (55.9%) are in agreement. 13
(2.5%) individuals strongly disagreed, and 18 (3.4%) participants disagreed. According to the study's findings,
eco-innovation creates new technologies for the production of goods (4.2 +.24).

Hypothesis
HI: Eco-Innovation has a significant and positive effect on profitability and sustainability of selected firms.

Profitability model:
P = f (Bo + B1ES + B2ST + B3ROI + B4ESP + B5SE+ B6ED + e)
Where:
P = Profitability
f = Function
B0 - B6 = Constants
ST = Sales Turnover
ES = Ecological Sustainability
ROI = Return on Investment
ESP = Ecological Sustainability Project
SE = Sustainability Entrepreneurship
ED = Environmental Degradation
e = Error Margin

487 www.journal-innovations.com
 Innovations, Number 75 December 2023

Table 4.15: Descriptive Statistics

Mean Std. Deviation N
Eco–Innovation 2.1794 1.42308 528
Market share of Manufacturing
2.5840 1.44325 528
Firms
Source; SPSS version 17.0

Table 4.16: Model Summary

Model R R Square Adjusted R Std. Error of the Durbin-Watson
Square Estimate
a
1 .874 .764 .763 .69265 .369
a. Predictors: (Constant), Eco–Innovation
Source: SPSS version 17.0

Table 4.17: Coefficients

Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
(Constant) .048 .088 .542 .588
1
Eco–Innovation .862 .030 .874 29.012 .000
a. Dependent Variable: Market share of Manufacturing Firms
Source: SPSS version 17.0

Result Summary

R = .874a
R2 = .764
F = 841.711
T = 29.012
DW = .369

Interpretation
The market share of manufacturing companies had a mean answer of 2.58 + 1.44 and the descriptive statistics
of eco-innovation had a mean response of 2.18 + 1.42. This suggests that there is roughly the same degree of
data point variability across the dependent and independent variables since the standard deviation scores show
little variation in standard deviation values.
Eco-innovation and market share of manufacturing enterprises are strongly positively correlated, according to
R, the correlation coefficient, which has a value of.874. According to the R square, or coefficient of
determination, eco-innovation accounts for 76.4% of the variation in market share of manufacturing
companies. The remaining 23.6% is explained by additional factors. The error of estimate for the linear
regression model is small, with a value of about.69265. There is no autocorrelation, according to the.369

488 www.journal-innovations.com
 Innovations, Number 75 December 2023

Durbin Watson statistics, which is not more than 2. Given that the regression sum of squares (403.828) is
higher than the residual sum of squares (124.740), the model is able to account for a larger portion of the
variance in the dependent variable, proving that the model is not random.
The significance of the model MS =.048 +.862(Eco-innovation) + e is demonstrated by the value of F-statistics
= 841.711. The amount that eco-innovation influences manufacturing business market share is shown by the
value of =.874, which shows a positive relationship between eco-innovation and manufacturing firm market
share that is statistically significant (with t = 29.012 and p =.000 0.05). Given that the model's significance
value is (0.000), which is less than 0.05, the model is significant.

The decision rule is to reject the null hypothesis if the probability value of (0.000) is less than the chosen 5%
alpha level otherwise do not reject the null hypothesis Therefore, the null hypothesis is rejected and the
alternate hypothesis is therefore accepted that Eco–Innovation has a positive and significant effect on market
share of selected manufacturing firms.

Discussion of Findings
According to the study, eco-innovation significantly and favorably influences the profitability and viability of
businesses of firms understudy and environmental sustainability (r =.874a; F = 841.711; T = 29.012; p -.000).
The aforementioned conclusion has supported the field survey's claim that eco-innovation significantly and
favorably affects the profitability and viability of businesses of certain manufacturing enterprises. This result
concurred with Lin and Geng's (2013) research on the impact of market demand, green products, and eco-
innovation on businesses' performance, which revealed a positive relationship between eco-innovation and
firm profitability. They also confirmed a link between eco-innovation and profitability and business
performance.

4.1 Conclusion
The study through its empirical evidence concludes that eco-innovation significantly and favorably influences
the profitability and viability of businesses studied and also has a positive and significant influence on
environmental sustainability. This means that eco-innovation is a confirmed potent solution to the failure of
market-based tools and government command and control systems to prevent harmful environmental
externalities and the undervaluation of natural resources due to the actions of profit-driven entrepreneurs
leading to overexploitation and depletion. The study also concludes that organizational practices of eco-
innovation have led to high degree of customer’s loyalty to firm’s product and sustainability of the
environment. The study concluded its finding by asserting that Eco-innovation generates new technologies in
product manufacturing and redesigns through eco-innovation practices and principles. The study also
concludes by revealing that Eco-innovation generates new ideas and process that’s positively associated with
customer’s satisfaction.

4.2 Recommendation
Based on the findings of this study, we recommend that business organizations should adopt eco-innovation
principles, practices and behaviours which is a potent solution to the failure of market-based tools and
government command and control systems to prevent harmful environmental externalities and the
undervaluation of natural resources due to the actions of profit-driven entrepreneurs leading to
overexploitation and depletion as well as a proven profitability model for businesses.

489 www.journal-innovations.com
 Innovations, Number 75 December 2023

References
1. Asel Doranova, Michal Miedzinski, Geert van der Veen, Alasdair Reid, Lorena Riviera Leon, Matthias Ploeg,
Malin Carlberg, Liina Joller - Technopolis Group (2012). Business Models for Systemic Eco-innovations. Online
source: www.technopolis group.com
2. A Report of the Millennium Ecosystem Assessment (2005) - Ecosystems and Human Well-being: Synthesis.
Island Press, Washington, DC,
3. Chukwuka, E.J (2018) Effect of ecopreneurship on organizational performance of selected manufacturing firms in
Africa, Evidence from Nigeria. Singaporean Journal of Business Economics and Management Review 6(2) 5-10
4. Chukwuka, E. J. & Eboh, E. A. (2018) Effect of Green Business Practices on Organizational Performance of
Selected Manufacturing Firms in Nigeria. International Journal of Development and Management Review
(INJODEMAR) Vol. 13 No.
5. Chukwuka, E.J & Nwomiko, U. (2018) Sustainability-Oriented Practices of Eco-Innovation, Eco-Commitment
and Organizational Performance of a Developing Economy. World Journal of Research and Review (WJRR)
Vol.6 (4)12-26
6. Cornel Ionescu (2016) Smart Specialization in Romania Specific objective of the National Strategy for Research,
Development and Innovation). Online source: www.researchgate.net.
7. Eco-Innovation Observatory Report (2015), Eco-Innovation in Romania, Country Profile 2015. Online source:
ec.europa.euz
8. European Union Report. (2015). Research and Innovation performance in Romania, country profile 2015. Online
source: ec.europa.eu
9. Geissdoerfer, M., Vladimirova, D., Evans, S., 2018. Sustainable business model innovation: A review. Jnl.
Cleaner Prod. 198, 401-416.
10. McKinsey Sustainability & Resource Productivity Practice - Resource Revolution: Meeting the world’s energy,
materials, food, and water needs. Online source : www.google.ro
11. OECD Directorate for Science, Technology and Industry (DSTI).(2011) – OECD Sustainable Manufacturing
Toolkit, 2011. Online source: www.oecd.org,
12. OECD Directorate for Structural Policy Division, (2009). OECD Directorate for Science, Technology and
Industry –OECD Sustainable Manufacturing and Eco-Innovation, Framework, Practices and Measurement,
Syntesis Report , Online source: www.oecd.org
13. The Gallup Organization upon the request of Directorate-General Environment (2011): Flash Eurobarometer 315
– Attitudes of European entrepreneurs towards eco-innovation - Analytical report. Online source: ec.europa.eu
14. United Nations Environment Programme 2018, Building circularity into our economies through sustainable
procurement, wedocs.un
15. UNEP, 2018, Mapping of global plastics value chain and plastics losses to the environment (with a particular
focus on marine environment), Ryberg, M., Laurent, A., Hauschild, M. United Na tions Environment
Programme, www.unenvironment.org
16. UNEP, 2019, addressing marine plastics: A systemic approach - Recommendations for action. Notten, P. United
Nations Environment Programme, www.unenvironment.org
17. Will Steffen, Wendy Broadgate, Lisa Deutsch, Owen Gaffney & Cornelia Ludwig (2015), The Trajectory of the
Anthropocene: the Great Acceleration, The Anthropocene Review. Map & Design: Félix Pharand -
Deschênes/Globaïa. Sage Journal, Volume: 2 issue: 1, pp 81-98.

490 www.journal-innovations.com

View publication stats