From stakeholder pressure to strategic advantage: a framework of achieving environment sustainability through pathway of carbon neutrality

Yadav, Sanjeev; Samadhiya, Ashutosh; Kumar, Anil; Luthra, Sunil; Pandey, Krishan Kumar

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Yadav, Sanjeev, Samadhiya, Ashutosh, Kumar, Anil, Luthra, Sunil and Pandey, Krishan Kumar (2026) From stakeholder pressure to strategic advantage: a framework of achieving environment sustainability through pathway of carbon neutrality. Business Strategy and the Environment. ISSN 0964-4733 (In Press)

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Abstract

Businesses are increasingly striving to reduce their carbon footprint, with carbon offsetting emerging as a viable pathway toward achieving carbon neutrality. Such efforts signify a demonstrated commitment to fostering environmental sustainability and contributing to a more sustainable future. Many countries have pledged to become carbon neutral in order to prevent climate change, but very little is understood about the micro-level influences. Nevertheless, a critical question remains: to what extent can carbon neutrality be achieved without the active involvement of stakeholders? Current scholarly literature offers limited discussion on this issue, indicating a gap that warrants further exploration. Therefore, the study aims to investigate the key influence of stakeholders on businesses tending to achieve carbon neutrality via the use of green innovative practices in their pursuit of environmental sustainability. The semi-structured interviews were conducted with the manufacturing industries’ experts. Rigorously, a qualitative analysis was employed, and the five major drivers were identified based on eleven sub-themes for carbon neutrality and green innovation, i.e., ‘customer enforcement’, ‘sustainable business value’, ‘potential benefits’, ‘environmental legitimacy’, and ‘competitive pressure’. Customers and competitors were the most influential external stakeholders. Shareholders and top management with intrinsic environmental values, being internal stakeholders, played pivotal roles in a proactive move to carbon neutrality and green innovation when there was limited regulatory pressure. The finding shows that the potential benefits of transitioning to carbon neutrality not only minimize waste and pollution but also lead to financial gains and a better image if implemented effectively, and the early movers/ investors also believe in the long-term economic benefits. Based on the research findings, a proposition-based support framework was proposed by stakeholder and institutional theory to guide firms’ managers in transitioning towards carbon neutrality goals or climate neutrality policies aligned with Sustainable Development Goal 13 (SDG 13).

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