The sustainability of innovation driven by KPI: An empirical analysis

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Abstract

Topics such as sustainable development, corporate social responsibility (CSR), and corporate innovation are increasingly important for maintaining corporate competitiveness. A growing number of companies recognize the need to inform their stakeholders about sustainable initiatives undertaken to safeguard the environment and the local area by adopting various approaches and strategies: cleaner technologies, new environmental management systems, energy efficiency initiatives, and carbon dioxide emission reductions. All these approaches are based on corporate innovation. We are facing a significant evolution that requires a paradigm shift in the way business is conducted, where innovation must not be oriented solely towards improving economic performance, but must also be geared towards achieving positive environmental and social outcomes. This is the context in which the two main drivers of corporate sustainable innovation emerge: sustainability on the one hand and innovation on the other. Both are of interest to companies regardless of size or sector. The challenge is daunting and requires communicating investments in sustainable innovation to gain greater market recognition and ensure a competitive advantage. Sustainable innovation has quickly attracted the attention of the academic world because, by integrating environmental, social, and economic dimensions, it can promote long-term value creation by balancing profit with social and environmental well-being, driving development towards more resilient and innovative business models. Studies empirically addressing the impact of sustainable innovation on corporate performance appear limited to date. For this reason, this paper aims to examine, on a sample of companies listed on the Italian Stock Exchange (Borsa Italiana), the extent to which investments in sustainable innovation improve corporate performance according to the sustainable innovation approach of “triple bottom line” (TBL). Three key performance indicators were established to delineate, in accordance with the TBL framework, the sustainable environmental, economic, and social performance of each organisation in the sample.

Keywords: Sustainability, Innovation, KPI, CSR, ESG

Authors’ individual contribution: Conceptualization — G.S., M.A.B., and M.R.; Methodology — G.S., M.A.B., and M.R.; Validation — G.S., M.A.B., and M.R.; Formal Analysis — G.S., M.A.B., and M.R.; Investigation — G.S., M.A.B., and M.R.; Writing — Original Draft — G.S., M.A.B., and M.R.; Writing — Review & Editing — G.S., M.A.B., and M.R.; Visualization — G.S., M.A.B., and M.R.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M14, Q56

Received: 13.07.2025
Revised: 10.10.2025; 25.10.2025
Accepted: 03.11.2025
Published online: 05.11.2025

How to cite this paper: Sicoli, S., Baldini, M. A., & Rija, M. (2025). The sustainability of innovation driven by KPI: An empirical analysis. Corporate Ownership & Control, 22(3), 169–176. https://doi.org/10.22495/cocv22i3art13