Clean energy innovation, corporate carbon footprint and profits: Win-win strategic options

Abstract

The widespread use of fossil fuels in production processes, along with a heavy dependency on carbon-based materials in firms that emit substantial amounts of carbon dioxide equivalent, poses a global threat to both environmental and economic sustainability. A better understanding is needed regarding the relevance of clean energy innovation and its direct and indirect impact on lowering carbon footprints in the existing body of research. This study employed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses methodology for a systematic review, followed by an in-depth evaluation of findings. The review examined 153 scholarly articles published between 2018 and 2023, aiming to assess the evolutionary nuances of clean energy innovation in the context of global decarbonisation. Results indicate that 58.5 % of evaluated hypotheses demonstrate a positive association between corporate environmental and financial performance, whilst 31.4 % show a negative impact on profitability. The remaining 10.1 % yield mixed findings. Notably, there is a paucity of research on the potential moderating or mediating effects of clean energy innovation on this relationship. This study contributes to the scientific corpus by identifying two understudied research areas. Firstly, Scope 3 emissions have a substantial and positive effect on the major corporations' overall financial performance. Secondly, further research is warranted to determine how clean energy innovation can moderate or mediate the relationship between eco-innovation strategies and company performance. This research is vital for understanding clean energy innovation's potential as a pathway toward decarbonisation.