The importance of sustainability orientation in the assessment of innovation becomes increasingly important as firms face macro-structural transformations, strong competition and stakeholder pressure towards sustainable conduct. However, traditional approaches to innovation assessment focus on financial outcomes and fail to capture the double externalities of sustainability-oriented innovations. In this paper, we therefore conceptualise a holistic approach to innovation selection that integrates environmental and social factors into the assessment. By applying an interdisciplinary view, we furthermore argue that this approach can be facilitated by adjustments to the economic-political framework. Conclusions for indicators supporting sustainability oriented innovation assessment in firms and for policy adjustments by political actors are presented.
Keywords: economic-political framework, environmental policy, externalities, innovation, innovation assessment, sustainability assessment, sustainable development, sustainability-oriented innovation, sustainability, stakeholder