The interplay of eco-innovation and stakeholder engagement: Driving sustainability-oriented business practices

This study investigates the interplay between Eco-Innovation (EI) and Stakeholder Engagement (SE) as pivotal enablers of Sustainable Business Model Innovation (SBMI), ultimately gaining improved Sustainability-Oriented Practices (SOPs). Grounded in Stakeholder Theory, this research employs Structural Equation Modeling in LISREL, analyzing data from 1076 respondents. The findings reveal that organizations leveraging EI while engaging diverse stakeholder groups—customers, local communities, employees, and suppliers—effectively enhance the deployment of energy and plastic SOPs, with a statistically significant moderating effect for Manufacturing Organizations. The paper contributes to literature by showing that (i) EI precedes and enables SE, and together they underpin SOPs, (ii) clarifying the differentiated roles of stakeholders across types of SOPs – energy and plastic-, (iii) highlights how manufacturing organizational context moderates these dynamics, and (iv) ultimately reframes SBMI as the joint outcome of EI and SE. • Eco-Innovation and Stakeholder Engagement drive SBMI transformation. • SEM analysis confirms links between SBMI and sustainability practices. • Study bridges Eco-Innovation, Stakeholder Theory, and SBM literature. • Stakeholder Engagement allows Plastic and Energy-oriented practices.