Innovation and corporate sustainability: An investigation into the process of change in the pharmaceuticals industry

Although there has been considerable research effort directed at refining the content of corporate environmental performance, e.g. corporate environmental reporting and accounting, there has been relatively little empirical investigation to date on the process of corporate eco‐change. This research reports on the quantitative and qualitative results of a survey of German and UK pharmaceuticals firms, which evaluated the significance of the various incentives, both intra‐firm and external to the organization, that have stimulated eco‐change. We find that, although the industry is one that has been characterized by voluntary agreements and proactive behaviour in the past, regulation still remains the main driver for sustainability improvements. New technology is the second most important driver. Stakeholder dialogue and inter‐firm cooperation were both revealed to be relatively weak forces for eco‐change. The study also tested the validity of the conventional neo‐classical economic world‐view of innovation in firms versus a more radical co‐evolutionary one. The former assumes that firms respond only to profit signals and do so efficiently, whereas the latter assumes that change is path dependent; i.e., the firms’ norms and routines and past experiences are influential. We find that, although the neo‐classical perspective stands up to our empirical investigation of eco‐innovation to some degree, the co‐evolutionary approach better captures the complexity of the corporate eco‐change process. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment