Corporate venture capital can give established companies access to green technologies developed by startups. In a Tribune article published by FNEGE Médias, Fatima Shuwaikh, Associate Professor at EMLV, examines how ambidextrous investment strategies can foster green innovation and reduce greenhouse gas emissions, drawing on research covering 126 US corporate investors over 20 years.
The findings point to a specific mechanism: companies gain the most from corporate venture capital when they combine investments close to their existing capabilities with exploration of technologies and business models further from their core activities.
Corporate venture capital as a route to green technologies
Climate change is increasing pressure on companies to reduce their environmental footprint while maintaining their ability to innovate and compete. One response is corporate venture capital (CVC), through which established companies invest directly in startups.
For companies seeking environmental technologies, these investments provide access to innovations developed outside their own organisations. The strategic question then becomes which types of investment portfolios are most effective at capturing this innovation.
The research addresses this question through the concept of ambidexterity: a company’s capacity to combine exploration and exploitation. Exploration involves investing in radically different technologies and business models, while exploitation builds on capabilities already present within the company.
126 corporate investors studied over 20 years
The study analyses 126 US corporate investors over a 20-year period. It distinguishes three approaches to ambidextrous corporate venture capital: static ambidexterity, dynamic ambidexterity and a strategy combining both.
Static ambidexterity refers to maintaining a balance between exploration and exploitation within a given period. Dynamic ambidexterity captures a company’s ability to invest simultaneously across business models that are both similar to and very different from its existing activities.
The results establish a positive relationship between ambidextrous CVC investments and the acquisition of green innovation.
Dynamic ambidexterity generates the strongest effect
Among the strategies analysed, dynamic ambidexterity produces the strongest positive effect on green innovation. Companies investing simultaneously in similar and substantially different business models generate more green patents. These patents also receive more citations, an indicator of their technological influence.
Balance within a given period also contributes positively to green innovation. Yet the strongest results appear when this balance is combined with a high level of dynamic ambidexterity.
Companies therefore benefit from combining the two approaches rather than treating exploration and exploitation as separate strategic choices. The resulting portfolio provides access to a broader range of technologies while retaining links with existing capabilities.
From green patents to lower greenhouse gas emissions
The research then examines what happens once companies acquire or generate green innovation.
The results identify a consistent relationship between green patents and environmental performance. Companies generating more green patents significantly reduce their greenhouse gas emissions, with the improvement persisting over time.
Green innovation can therefore be examined as a measurable component of environmental performance rather than solely as an innovation indicator.
This connection between technological choices, business strategy and environmental outcomes also echoes the EMLV Programme Grande École’s approach to management education, which combines management, technology and societal and environmental issues.
Combining environmental performance and competitiveness
For managers, the findings provide a framework for structuring corporate venture capital portfolios. Combining exploration and exploitation can help companies access technologies that respond to stakeholder expectations, regulatory requirements, and the economic consequences of high emissions.
The implications extend to long-term competitiveness. Green technologies acquired through CVC can contribute both to reducing emissions and to developing business models adapted to environmental constraints.
This perspective is particularly relevant to management functions dealing with investment, strategy, innovation and sustainability: environmental performance becomes connected to decisions about capital allocation and the organisation of innovation.
What the findings mean for public policy
The research also identifies implications for regulators and governments. Public policies can facilitate corporate access to green innovation by supporting investments in startups developing environmental technologies.
Subsidies for green startups, tax credits for environmental investments and regulatory or innovation sandboxes are among the mechanisms identified in the study. Such measures can encourage established companies to experiment with and adopt cleaner technologies.
The research therefore gives policymakers a more precise target for environmental innovation policies: facilitating connections between corporate investors and green startups can help lower emissions across industries.
For companies, the strategic issue is equally concrete. The composition and evolution of a corporate venture capital portfolio can influence the quantity and reach of green innovation generated — and, ultimately, the emissions recorded over time.
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