Strategic decoupling through legitimacy: the sustainability-innovation gap in the food processing sector and its...

Environmental and public health impacts are critical in the food processing industry. To demonstrate responsiveness to stakeholder expectations, firms foreground sustainability reporting through frameworks such as Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR). Yet the sustainability rhetoric usually centers on visible, marketable, and peripheral dimensions, including packaging, energy use, and philanthropy. In contrast, domains within their core operations, including product composition, nutritional quality, and marketing ethics, receive limited attention. Subsequently, concerns over the commercial determinants of health rise, particularly for vulnerable populations.

The study follows an embedded mixed-methods design to examine whether sustainability disclosures align with firms' innovation strategies. Using 2023 data from 90 multinational or export-oriented food processing firms, hierarchical and multiple regression models assess the effects of ESG sub-dimensions and CSR scores on R&D expenditure, controlling for market capitalization (MC). To complement the quantitative analysis, the study includes a qualitative examination of selected firms, illustrating how sustainability-innovation gaps manifest in practice.

Findings reveal no systematic alignment between sustainability and innovation strategies. The environmental dimension shows a marginally positive yet statistically insignificant relationship with R&D, while social, governance, and CSR metrics exhibit no meaningful association. MC remains the strongest predictor of R&D, highlighting that financial and organizational capacity drives innovation rather than sustainability commitment. Notably, CSR aligns more closely with environmental than social performance, indicating a selective legitimacy orientation. Firm-level evidence also reflects the patterns of symbolic compliance, illustrating how strong ESG scores can coexist with weak sustainability integration.

The weak coupling between sustainability communication and innovation behavior exposes a structural gap between corporate legitimacy efforts and tangible outcomes for sustainable development. Firms that prioritize reputational visibility over substantive innovation reinforce health inequities and constrain systemic reform. To enhance environmental and public health outcomes, both corporate and regulatory strategies should move beyond symbolic compliance toward outcome-based accountability. Such a shift can better incentivize innovation that enhances nutritional quality, strengthens social equity, and protects environmental integrity.