Integrating Products, Processes, and Sourcing for Eco‐Innovation

ABSTRACT Eco‐innovation research has often examined regulatory or technological drivers but has paid limited attention to how long‐term organizational change shapes eco‐innovation in mature, resource‐intensive industries. This study addresses that gap by investigating how two leading Finnish pulp and paper firms integrated product, process, and sourcing innovations during their transition toward the bioeconomy between 2007 and 2017. Using a historical, mixed‐methods approach grounded in neo‐institutional theory, we trace how various pressures influenced strategic shifts and innovation trajectories. The findings reveal that sustained organizational transformation, rather than isolated technological initiatives, was critical for embedding eco‐innovation and achieving resilience amid industrial decline. The study contributes to the eco‐innovation and institutional theory literatures by offering a dynamic model that links institutional pressures to firm‐level innovation transitions. The insights are relevant for managers seeking to align sustainability and profitability in mature sectors and for policymakers designing long‐term frameworks that foster eco‐innovation in carbon‐intensive industries.