About Eco Innovation

EcoInnovation is a new concept for which a standard definition does not exist yet. OECD defines EcoInnovation as "innovation that results in a reduction of environmental impact, no matter whether or not that effect is intended".

A more detailed definition suggests that EcoInnovation is "the creation of novel and competitively priced good, processes and systems that can satisfy human needs... with a minimal use of natural resources…and a minimal release of toxic substances" (Reid and Miedzinski, 2008).

EcoInnovation differs from generic innovation on two significant characteristics:

• Its explicit emphasis on reduction of environmental impact
• Its wider scope which includes non-technological innovations in social and institutional structures beyond the technological innovations in products, processes, marketing methods and organisational methods

Corporate Social Responsibility Policy

Evidence suggests that demand factors such as requirements of corporate social responsibility (CSR) policy and new growing markets for environmental goods/services are important drivers of Eco Innovations. Moreover, more stringent environmental regulations are associated with higher rates of EcoInnovations.

EcoInnovations, in return, increase competitiveness of the firms and countries that eco-innovate. This result is likely to become more pronounced in the near future as the effects of climate change become more severe and firms' performance become conditional on their EcoInnovations.