Opportunities and Challenges of Sustainable Innovation for Climate Change Mitigation in Companies: A Systematic Literature Review

ABSTRACT The escalating environmental degradation and tightening regulations worldwide since the 1990s have heightened environmental concerns among organizations, necessitating innovative and sustainable responses to climate change. This article aims to explore opportunities and challenges of sustainable innovations for mitigating climate change within companies. A systematic literature review was conducted, encompassing 42 articles from 2005 to 2022. Most studies originate from European countries, particularly from institutions like Sapienza University of Rome, Jinan University, and Amsterdam Business School. Notable authors include Rosa Maria Dangelico, Ans Kolk, and Jonatan Pinkse. The most cited journals include Business Strategy and the Environment , Journal of Cleaner Production , and Sustainability (MDPI). Identified opportunities for companies embracing climate change mitigation through innovation include enhanced image and competitiveness. Challenges comprise high implementation costs, ambiguous sustainable development guidelines, partnership scarcity, technological risk uncertainties, consumer acceptance concerns, deficient tools for low‐carbon product development, and the sociotechnical system's influence. Moreover, companies face hurdles like reliance on supply chain complementary capabilities and regulatory uncertainties. Future research should prioritize less costly sustainability practices and examine the sociotechnical factor's impact on sustainable innovation adoption. Prohibitive investment costs hinder companies from embracing these practices, highlighting the need for cost‐effective alternatives. Understanding the sociotechnical dynamic's role in driving or obstructing sustainable innovation adoption is crucial for comprehensive analysis and effective strategy development.