Carbon emission reduction: Understanding the micro‐foundations of dynamic capabilities in companies with a strategic orientation for sustainability performance

This article aims to identify the micro‐foundations of dynamic capabilities that underpin a strategic orientation for sustainability performance in order to reduce carbon emissions. These micro‐foundations are examined in relation to two types of strategic orientation for sustainability performance: instrumental and stewardship. A qualitative research design is used to investigate four Dutch stock‐listed companies with either an instrumental or a stewardship strategic orientation. The research shows that certain micro‐foundations of dynamic capabilities achieve carbon emission reductions. Sensing, through measuring carbon emissions, supports a transparent raising of awareness on this issue. Seizing is based on a collaborative and carbon‐driven capturing of value enabled by clear financial incentives linked to reducing carbon emissions. Transforming is supported by an ambidextrous organizational structure and the active diffusion of knowledge concerning carbon emission reduction. Top management can deliver a significant impulse to achieve the desired level of influence related to carbon emission reduction. Our analysis reveals five dimensions (level of influence, level of transparency, level of responsibility, logic of value creation, and logic of embeddedness) that explain the relation between a strategic orientation for sustainability performance and the associated sustainable performance achieved in carbon emission reduction.