Linking Carbon Reduction Targets to Performance: The Role of Dynamic Capabilities & Green Innovation

 

1. Introduction

Linking carbon reduction targets to actual carbon performance has become a critical challenge in sustainability research. While organizations increasingly commit to emission reduction goals, achieving tangible outcomes depends on internal capabilities and innovation-driven actions. This research framework emphasizes how strategic intent must be supported by organizational adaptability and technological innovation to translate climate ambitions into measurable environmental performance.

2. Carbon Reduction Targets as Strategic Signals

Carbon reduction targets serve as strategic signals that guide organizational priorities, resource allocation, and long-term sustainability planning. When effectively integrated into corporate strategy, these targets motivate firms to adopt cleaner processes, monitor emissions rigorously, and align operational decisions with climate objectives, reinforcing accountability and performance orientation.

3. Role of Dynamic Capabilities in Sustainability

Dynamic capabilities enable organizations to sense environmental challenges, seize green opportunities, and reconfigure resources in response to evolving regulatory and market pressures. In the context of carbon management, these capabilities act as a bridge between strategic targets and operational execution, ensuring firms remain flexible and resilient in their sustainability journey.

4. Green Technology Innovation Behavior

Green technology innovation behavior reflects a firm’s proactive engagement in developing and adopting environmentally friendly technologies. This behavior enhances energy efficiency, reduces emissions, and supports cleaner production systems, playing a crucial role in converting sustainability strategies into tangible carbon performance improvements.

5. Serial Mediation Between Targets and Performance

The serial mediating effect of dynamic capabilities and green technology innovation highlights that carbon reduction targets alone are insufficient. Instead, firms must first build adaptive capabilities, which then stimulate green innovation behavior, ultimately leading to superior carbon performance outcomes and long-term environmental competitiveness.

6. Implications for Research and Policy

This integrated perspective offers valuable implications for sustainability research, corporate governance, and environmental policy. It underscores the need for capability-driven innovation frameworks, encouraging policymakers and organizations to support capacity building and green R&D investments to achieve meaningful carbon reduction and climate resilience.


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