Greening from within: the role of organisational purpose shift in building internal legitimacy for fossil fuel incumbents’ green innovation

Green innovation that reduces harmful emissions and impacts on the natural environment is crucial in combatting the climate crisis. Yet, incumbents in carbon-intensive industries struggle with its development due to their lack of organisational commitment. We investigate how fossil fuel incumbents can overcome this obstacle and build internal legitimacy for green innovation. Through a longitudinal case study of a Norwegian oil major over 20 years, we highlight the important role of organisational purpose shift. We derive a process model of how fossil fuel incumbents can shift from a goal-based organisational purpose focused on profitability towards a duty-based purpose connected to sustainability-oriented values, building internal legitimacy for green innovation. Our study also demonstrates that organisational purpose shift, when only selectively and gradually realised, impedes full decarbonisation. We contribute to the literature on innovation studies by discussing how organisational purpose shift and internal legitimacy can enhance sustainable innovation in fossil fuel incumbents.