Abstract
In the preceding decade, the imperative for effective dimensional integration of the “triple bottom line” has garnered escalating attention in scholarly and practical domains. Contemporary businesses find themselves compelled to interlink their resources within a broader context, propelling their business models through the prism of sustainability to synchronize profitability objectives with environmental and social imperatives. This study investigates the interplay between environmental orientation and sustainable innovation, exploring the mediating role of dynamic capacities, utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM). Survey-based empirical insights from 348 Italian manufacturing entities reveal that dynamic capabilities mediate the relationship between environmental orientation and sustainable innovation performance, resulting in enhanced environmental, social, and economic outcomes. Particularly, cultivating dynamic capabilities demonstrates a stronger association with internal environmental orientation. The research contributes to understanding the nexus between dynamic capabilities and sustainability, emphasizing the roles of organizational learning, shared vision, relationship building, cross-functional integration, and technology sensing/response capabilities. The findings highlight the importance of aligning socio-ecological attributes with stakeholder benefits and technological capabilities for success in sustainability-oriented innovations. The outcomes are discussed with consideration of limitations and implications for practical applications and future research.