Supply Chain Sustainability—Drivers, Inhibitors, Solutions - Technology Management for Sustainable Production and Logistics - page 67

effects of supply chain pressure and influence of campaigning being also crucial
in some circumstances (Green 2005 ). Horbach ( 2008 ) has investigated the deter-
minants of environmental innovation in Germany, and has found that environmen-
tal regulation was an important driver. Kammerer ( 2009 ) identified environmental
regulations as the most important driver of eco-innovation as it can change the
level and nature of competition between firms.
First-generation environmental regulation relied on “command and control”
model. succeeding government grants can be also viewed as a potential alternative
approach to encouraging eco-innovation. They can be used to fund and support
a myriad of green activities such as the removal of harmful substances, incentiv-
izing early consumer adoption of new eco-friendly goods (by sharing the costs of
producing green houses and cars) or by funding research and development projects
(Doran and Ryan 2012 ). For example in 2010, the Irish Government committed
660 million to sustainable energy programs (Doran and Ryan 2012 ). Firms which
receive grants are more likely to introduce eco-innovation (5.96 %), however, the
responsiveness of firms to this incentive is less than regulation (16.87 %) (Doran
and Ryan 2012 ). The availability of government grants appears to be the least
important (experienced by only less than 6 % of firms) while existing regulation,
customer perceptions and voluntary agreements appear to be the most frequently
experienced (Doran and Ryan 2012 ).
But grants or regulations (existing or expected) are not always needed to fos-
ter eco-innovation. Environmental technology innovation often diffuses without
political impact. External linkages are also important drivers of eco-innovation.
In many cases consumer demand for environmentally friendly products, interest
group pressures, social corporate responsibility and public procurement require-
ments are enough to induce firms to develop, adapt and use more environmentally
friendly products, process and management systems (Horbach 2008 ). Community
may exert pressure, for example by causing negative publicity, on firms to improve
certain aspects of activity. Pressure from environmental interest groups, seem to
compel organizations to take appropriate actions and manage their sustainability.
The adoption of eco-efficient standards became to be a requirement for compa-
nies to be selected by customers and included in their supply chains (Seuring and
Müller 2008 ).
Furthermore, it is important to highlight the role of sustainable consumption
for overall sustainability and customer demand for sustainable goods and ser-
vices. The adoption of eco-efficient standards seems to be a basic requirement
of a growing group of customers. Market demand was found to have significant
impact on green product innovation and green process innovation (Lin et al. 2014 ).
Significant relationships were found between green product innovation and mar-
ket share and reputation. Green process innovation also was found to have sig-
nificantly positive impact on both market share and reputation (Lin et al. 2014 ).
The next largest effect is a customer's perception. The demand for eco-innovation
products is largely driven by the way in which consumers perceive the eco-innova-
tion. Firms which believe customers expect environmentally friendly products are
43 % more likely to eco-innovate (Kammerer 2009 ).