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Over the past decade, companies have become increasingly aware of the social and environmental pressures facing business. Many management scholars and consultants have argued that these new demands offer terrific opportunities for progressive organizations, and innovation is one of the primary means by which companies can achieve sustainable growth. 1 Companies that ignore these pressures, the argument goes, do so at their own peril. But the reality is that managers have had considerable difficulty dealing with sustainable development pressures. In particular, their innovation strategies are often inadequate to accommodate the highly complex and uncertain nature of these new demands.

A strategy that integrates the goals of innovation and sustainable development is needed. In contrast to conventional, market-driven innovation, sustainable development innovation (SDI) must incorporate the added constraints of social and environmental pressures as well as consider future generations. 2 SDI is therefore usually more complex (because there is typically a wider range of stakeholders) and more ambiguous (as many of the parties have contradictory demands). Furthermore, sustainable development pressures can be driven by science that has yet to be accepted fully by the scientific, political and managerial communities. Amid such uncertainty, sustainable development innovation is often difficult and risky. Nevertheless, faced with increasing pressure to consider sustainable development, many organizations have revised their business models, and these changes are often highlighted in corporate sustainability reports and Web …