Sustainable Development Goal‐Related Innovations and Financial Performance : Evidence From European Grocery Retailers

Abstract

The grocery retail industry is of great economic importance, with millions of people employed in the sector and billions of customers served. Consequently, the sustainability initiatives undertaken by retailers have a substantial impact. This paper explores the impact of innovations related to the Sustainable Development Goals (SDGs) on retailers' financial performance. The findings of this study indicate that the 18 largest European grocery retailers introduced 2701 innovations between 2007 and 2021, of which 783 were SDG‐related. Furthermore, these SDG‐related innovations impacted financial performance positively. Innovations related to SDG2 (zero hunger), SDG9 (industry, innovation and infrastructure), and SDG12 (responsible consumption and production) had a significant and positive effect on the financial performance of grocery retailers, thereby inspiring a new wave of sustainability‐related practices in the industry. The present study contributes to the extant literature by demonstrating that profitable SDG‐related innovations have been identified in all three areas of the triple bottom line approach.