Eco-innovation capacity and the dimensions of sustainable development in European Union countries

The aim of this study is to examine the relationship between eco-innovation capacity and the economic, social and environmental dimensions of sustainable development in the European Union. The analysis employs partial least squares structural equation modelling (PLS-SEM) based on Eurostat data and indicators from the EU Eco-Innovation Index for the 27 EU Member States, with 2023 as the reference year. Eco-innovation capacity is operationalised using input- and output-related indicators, thereby distinguishing innovation capabilities from eco-innovation outcomes. The results confirm positive and statistically significant relationships between eco-innovation capacity and all three dimensions of sustainable development. The numerically highest path coefficient is observed for the social dimension, although the differences between the three coefficients are relatively small. The cross-sectional design and the deliberately narrowed operationalisation of the constructs constitute the main limitations of the study. The findings provide evidence relevant to innovation and environmental policy design. The originality of the study lies in combining a capability-based operationalisation of eco-innovation with an integrated assessment of its relationships with the economic, social and environmental dimensions of sustainable development.