Toward a Sustainable Society: The Role of Environmental Knowledge, Knowledge Capability, Sustainable Innovation, and Innovation Orientation in Product Innovation

Contemporary stakeholders persist in pressuring firms toward environmental stewardship, while dynamic organizations demonstrate high-level capability and strategically respond to market evolution and align operations toward sustainability. This study aimed at investigating the connection between environmental knowledge and awareness and product/service innovation, as well as the mediating roles of knowledge process capability-application dimensions and sustainable innovation, and the moderating effects of innovation orientation. Through a questionnaire, empirical data were collected from 354 bank employees operating in western Nigeria, whose bank ranked on the list as being the most sustainable bank in Nigeria in the 2024 sustainability ranking. SPSS and SmartPLS were used for data analysis and the testing of hypotheses. The findings showed a significant positive association between environmental knowledge and awareness and product/service innovation, and additionally, knowledge process capability-application and sustainable innovation significantly mediate the relationship between environmental knowledge and awareness and product/service innovation. Meanwhile, innovation orientation negatively moderates the relationship between environmental knowledge and awareness and knowledge process capability-application. However, innovation orientation did not moderate the relationship between sustainable innovation and product/service innovation. This study underscores the importance of knowledge management strategy and firm innovation orientation toward sustainability stewardship in service organizations and provides valuable theoretical insights for management scholars. An integrated dynamic capability, as well as absorptive capacity theories, underpinned this study.