Integrating Sustainable Innovation into Corporate Strategy

Sustainable innovation spurs financial performance, effectiveness, and strength. Embraced by MNEs, business sustainability mainstreaming remains a challenge due to regulation, technological limits, and differential stakeholder expectations. This study employs a mixed-methods approach, utilizing insights from over 100 executive surveys, in-depth case studies of Tesla (US), Unilever (British), BYD (China), Natura & Co. (Brazil), and Tata Group (India), and geopolitical and economic analysis to investigate the role of sustainable innovation in driving global business success. The research outlines three principal pillars to the effective integration of sustainability: stakeholder engagement, leadership, and policy support. AI-driven ESG analytics transforms sustainability reporting by improving data-driven decision-making; however, it remains constrained by algorithmic bias, lack of transparency, and rating inconsistencies (e.g., ExxonMobil’s varying ESG scores across MSCI, Sustainalytics, and Refinitiv). Effective regulatory oversight, third-party audits, and explainable AI governance models are necessary to ensure credibility and accountability. Regional regulatory patterns are explored using Institutional Theory, comparing the EU's mandatory CSRD with voluntary U.S.’s SEC guidelines and hybrid Asian arrangements. Using the RBV, linking resources to competitive advantage, and Dynamic Capabilities Theory, which addresses adaptive innovation, the study illustrates how firms utilize sustainability to render markets more resilient. The conclusions provide practitioners with options to match sustainability with operation and financial objectives. For policymakers, they reveal methods to balance rules. This study encourages a governance-oriented approach to sustainability, seeing it as a driver to solve global environmental and social injustices and not merely an obligation to comply.