Intellectual capital and human dynamic capabilities in decarbonization processes for net-zero business models: an in-depth examination through a systematic literature review Open Access

Over the last 3 decades, the world has experienced tough periods of climate change because of which concepts of decarbonization and integrated reporting (IR) in sustainability transition have grabbed the attention of practitioners and scholars. Therefore, regulatory bodies have tried to get firms to take precautionary measures to minimise the negative environmental impacts caused by them by adopting decarbonization practices and improving their reporting capabilities according to defined standards (Eastburn, 2000; Gregurec et al., 2021). Growing concerns regarding firms’ operational activities are pressurising, firms to focus on social issues and transparency through IR to maintain legitimacy (Khan et al., 2021). To meet the challenges of this global threat, the United Nations (UN) Climate Change Conference introduced the historic Paris Agreement in 2015, setting long-term goals for all nations towards sustainability. This has led to firms facing many challenges in maintaining their competitiveness in the decarbonization process (Singh and Rao, 2016).

Recognising this, local governments are designing short- and long-term decarbonization practice policies at local levels (Linton et al., 2020). This is because countries that focus on adopting sustainability practices have high disclosure quality (Stuart et al., 2023). In fact, decarbonization depends on the complete transformation of society in terms of net-zero business models (n-ZBMs), sustainability goals, social equity and climate change mitigation (Linton et al., 2020). Therefore, strategic management is essential to explore dynamic capabilities (DCs), which are defined as resources that provide business organisations with a competitive advantage (Teece et al., 1997), and influence innovation. Most firms invest in human resources and technological innovation to maintain their capabilities (Canibano et al., 2000). A firm’s ambidexterity refers to its capacity to simultaneously manage business demands in a coordinated and effective manner (explorative dynamic capability) and adapt to environmental changes (exploitative dynamic capability) (O’Reilly III and Tushman, 2008).

Singh and Rao (2016) found that human dynamic capabilities (HDCs) and intellectual capital (IC) enable firms to achieve their goals because both are positively associated with sustainable development. The DCs are a firm’s potential to configure its competencies to respond to rapidly changing environmental challenges (Garavan et al., 2016), whereas IC, as defined by the World Intellectual Capital Initiative is “the dynamic existence of internal and external intangible assets in an organization” (Wang et al., 2019, p. 3). Scholars are investigating these concepts from different perspectives to understand them deeply because they are the most important drivers of growth and development for firms over time (Halberstadt et al., 2019). However, the literature lacks the development to link these concepts with business models (Baima et al., 2020).

In the last decade, carbon accounting has also attracted the attention of scholars as it is an essential tool for fighting global warming by reducing carbon emissions (Farbstein et al., 2022). More than a decade ago, Stechemesser and Guenther (2012) elucidated that carbon accounting refers to endeavours to integrate climate change mitigation into accounting protocols. This designation is employed by natural scientists and financial analysts. Stechemesser and Guenther (2012) comprehensively reviewed carbon accounting definitions, contributing to discussions on including both monetary and non-monetary emission values in accounting systems, emphasising that carbon accounting definitions focus on the measurement, compilation, evaluation and communication of emissions by firms to inform stakeholders.

While global warming is threatening the world with its negative environmental impacts, firms are being pressurised by institutions and stakeholders regarding carbon emissions and carbon accounting focus (Rohani et al., 2023). Stakeholders are more concerned about firms’ environmental issues and pressurise them to obey regulatory body rules to meet sustainable development (Chuang and Huang, 2018). Stakeholders also urge firms to sustain their HDCs. Therefore, firms must exploit IC to make their businesses more effective in the digital economy (Gupta et al., 2020). Meanwhile, firms manage their strategies and design their business models according to environmental policies to reduce their negative environmental impacts (Essid and Berland, 2018). The n-ZBMs depend on e-businesses, strategy management, green technology adoption, and responsible innovation (De Giacomo and Bleischwitz, 2020). To date, most of the literature has elaborated that to design business models, firms must focus on sustainable energy (Niesten and Alkemade, 2016), a circular economy (Nussholz, 2017) and sustainable innovation (Geissdoerfer et al., 2018), necessitating the adoption of environmental management practices that address the environment’s sustainability aspect by implementing decarbonization processes and n-ZBMs (De Giacomo and Bleischwitz, 2020).

Previous literature has rarely discussed IC and HDCs in light of decarbonization practices. Therefore, utilising ambidexterity, institutional, legitimacy, resource-based view and stakeholder theories, this study analyses the link between IC and HDCs towards n-ZBMs, focussing on carbon accounting. Based on the aforementioned theories, firms agree on a social contract between themselves for the betterment of society. Specifically, the legitimacy, institutional, and stakeholder theories ensure that firms’ operations are within societal norms, accepted by all stakeholders and based on institutional pressures (Paoloni et al., 2023). In contrast, ambidexterity, and resource-based view theories support DCs to improve firms’ performance towards sustainability by considering IC as a primary source (Rehman et al., 2023). Thus, this study examines the implementation of decarbonization methods that incorporate green technology and renewable resources to mitigate carbon emission-related concerns. All these are closely associated to obtain n-ZBMs based on corporate accountability, which besides being dependent on environmental dimensions is also dependent on sustainability’s social dimensions. Firms can use their capital resources to obtain technological innovation and design long-term business models to gain a competitive edge (Xiao and Yu, 2020). However, the link between IC and HDCs to address carbon emissions through decarbonization practices is missing in the literature. There is insufficient theoretical understanding of IC and HDCs’ roles in the decarbonization process to achieve n-ZBMs. Additionally, knowledge regarding their measurement and reporting is limited. Therefore, aiming to bridge the aforementioned gap in the literature, this study analyses the literary corpus and highlights the current knowledge in the field by answering the following research question (RQ):

Following Snyder (2019), this study uses a systematic literature review (SLR) as a research method. It is optimal to adopt SLR to elucidate the connections between HDCs, carbon accounting, and IR during sustainability transition. Similarly, the SLR serves to comprehensively grasp how previous research endeavours in accounting have addressed various research questions. SLR aids in identifying, analysing and discussing the connections established in prior studies, while also providing theoretical and practical implications, introducing new conceptual frameworks and outlining future directions for research advancement in the accounting domain (Burritt et al., 2023; Damschroder et al., 2022; Elbardan et al., 2023; Guthrie and Parker, 2011). Using the visualisation of similarities viewer (VOSviewer) program version 1.6.5, we analysed 229 articles published between 1990 and 2023 in English from the Scopus database and Google Scholar (GS), through descriptive, bibliometric and network analyses, exporting the publication metadata to Microsoft Excel 2019; Waltman et al., (2010). By using bibliometric analysis, this study offers a comprehensive overview of academic networks, helping researchers determine “how” to place themselves within research areas and map out the major evolutionary paths (Krishen et al., 2021).

The remainder of this study is organised as follows. Section 2 comprises the theoretical background of the study. Section 3 describes the methodology used. Section 4 presents the results. Section 5 presents the discussion, followed by the conclusion in Section 6.

Sustainability transition has gained considerable attention over the last 2 decades. Theoretically, four frameworks (transition management, strategic niche management, multi-level perspective on sociotechnical transitions and technological innovation systems) concerning sustainability transitions have emerged in policy and research interests (Markard et al., 2012). Carbon accounting is an important tool for measuring carbon emission reduction, leading towards a sustainability transition (He et al., 2021; Schaltegger and Csutora, 2012).

The Corporate Sustainability Reporting Directive (CSRD) reviews the sustainability reporting standards prepared by the European Financial Reporting Advisory Group (EFRAG) to ensure reliability and information availability for stakeholders (Ostir, 2023). Regulatory bodies urge firms to align their goals with the UN 2023 Agenda, COP27 and 2015 Paris Agreement to reduce carbon emissions. The Kyoto Protocol also aimed to reduce or limit greenhouse gas (GHG) emissions. Carbon accounting is the outcome of the Kyoto Protocol and the European Union Emissions Trade Scheme (EU ETS). Replacing the Kyoto Protocol, the Paris Agreement motivates firms to decarbonize their routine activities, leading to sustainability transition (He et al., 2021). Regulatory policies cause survival issues for firms unable to respond to net-zero goals (Glynn and Cooper, 2022). Therefore, under the broad lens of the institutional theory and with the increasing awareness of climate change, it is necessary to know how firms respond to these policies and measures (Andrews-Speed, 2016). Adopting carbon accounting in sustainability transition helps reduce firms’ carbon emissions and the institutional theory helps bring advancements to meet institutional pressures (Dagiliene and Nedzinskiene, 2018; Gunarathne et al., 2021).

Using existing literature, we try to cover the responses of firms to institutional pressures; however, there are some gaps that need addressing (Bui and Fowler, 2019; Jeswani et al., 2008). Carbon accounting plays a major role in helping firms design low-carbon business models (Alrazi et al., 2015; Bui and Fowler, 2019). Therefore, regulatory bodies regularly scrutinise firms’ practices, aligning them with environmental policies and helping them develop human resource capabilities to support sustainability transition (Hahn et al., 2015; Singh et al., 2021). Firms cannot sustainably transition without focussing on their employees and other stakeholders. Over the last 3 decades, human resource management issues have increased, and this topic has gained immense attention (Di Vaio et al., 2020a).

In light of the sustainability debate, some scholars are focussing on IC as it is directly connected to achieving sustainability goals (Vale et al., 2022). Moreover, IC, natural resources, and increasing innovation investments are main drivers toward the transition to a zero-carbon economy (Grecu, 2023). Scholars argue that IC is an important pillar for the sustainable development of firm (Matos and Vairinhos, 2017; Secundo et al., 2020; Suciu and Nasulea, 2019). IC comprises three main components: employee/human, structural, and relational capital (Zerenler et al., 2008). Among these, human capital, which is a strategic resource for firms, is most important. In fact, IC considers it to be as an engine of growth for firms as it leads to innovative and competitive sustainable development (Alvino et al., 2021), which highlights its importance in dealing with climate change.

Climate change calls for a thoughtful adoption of decarbonization practices for technological innovation to reduce or eliminate carbon emissions (Yang et al., 2023). Decarbonization practices help sustainability transition by adopting technologies that depend on fossil fuels and redesigning institutional structures (Linton et al., 2020). Therefore, DCs are considered as important factors for firms to frequently adopt environmental changes. Since the introduction of the Paris Agreement, decarbonization practices have gained increasing attention (Buana et al., 2023). Environmental accounting practices, which form part of decarbonization practices, are positively associated with firms’ management operational planning and decision-making to achieve a circular model (Scarpellini et al., 2020). Carbon accounting practices help firms manage their natural resources and capabilities and addresses environmental sustainability in terms of regulatory and societal standards (Gibassier and Schaltegger, 2015). Moreover, carbon reporting fairly represents firms’ efforts in reducing emissions to external stakeholders (Gibassier and Schaltegger, 2015). For the last 20 years, firms are being pressurised to focus on sustainability related consideration in their strategies (Castiaux, 2012). To promote sustainable development and create value, firms must formulate and execute innovative strategies, improving environmental quality. Accordingly, they must explore the ambidexterity theory to balance exploratory and exploitative practices and improve their performance (Asiaei et al., 2022). The ambidexterity theory helps firms discover new opportunities to use their existing capabilities to attain a competitive advantage, specifically by utilising existing knowledge related to environmental factors (Asiaei et al., 2022). IC can help arrange firms’ routine practices to understand and explore their capabilities to meet their goals (Singh et al., 2021). Bueno et al. (2004) proposed an IC model that included “social innovation capital”, as IC supports the development of new ideas (Dabić et al., 2021). IC, based on social innovation, benefits society in achieving carbon neutrality (Konno and Schillaci, 2021).

IC disclosure is an important element of IR. As the IR framework is based on capital management, the International Integrated Reporting Council (IIRC) classifies firms’ capital into six categories: natural, social, intellectual, human, financial, and working (Pratama et al., 2020). The resource-based view theory argues that firms can evaluate their resources’ weaknesses and strengths, selecting a suitable strategy to achieve their goals (Hsu and Wang, 2012). Equitable decarbonization practices are essential to adopt legitimate practices (Sareen and Haarstad, 2020). Apart from this, firms need HDCs to design their sustainability-oriented business models, however, the role played by firms to encourage has been rarely addressed (Bocken and Geradts, 2020). Therefore, the purpose of this study is to link IC with HDCs to design n-ZBMs using carbon accounting. Firms are encouraged to adopt decarbonization practices to mitigate climate change issues, satisfy the stakeholder requirements and effectively address institutional pressures.

Over the last couple of decades, DCs have actively aroused the interest of scholars. According to the resource-based view theory, DCs are necessary to achieve competitive advantages for firms (Barrales-Molina et al., 2015), and human resources are micro-foundations for DCs (Verona and Zollo, 2012). While under the resources-based view, resources are important for developing sustainable business models, the stakeholder theory highlights the critical role played by stakeholders in developing these models (De Giacomo and Bleischwitz, 2020). Stakeholders are motivated to make firms accountable for their interests in sustainable development through environmental, social, and governance (ESG) disclosures (Al Amosh and Khatib, 2021; Hahn et al., 2015). Therefore, stakeholder pressure on firms to conduct their activities within societal acceptance and HDCs helps manage stakeholders’ expectations of being proactive towards renewable resources and n-ZBMs (Singh et al., 2021).

Accordingly, human resources can help firms transform towards n-ZMBs in three key areas, that is, purpose, value, and culture, further divided into decision-making, learning, ecosystem, talent, structure, and platform (Komm et al., 2021). Human resources form the basis of business models, enabling firms to create and protect their resources to innovate and sustain their performance. Firms with strong DCs are good adaptors of eco-friendly environments, as they not only create n-ZBMs, but also enhance their performance through more innovation (Teece, 2007).

Firms must disclose the sources of their competitive advantages to stakeholders, regulatory bodies, and financial analysts. However, financial statements do not sufficiently represent all the relevant human resources-related information (Salvi et al., 2022). Existing literature highlights that non-financial disclosure (NFD) highly influences firms’ value creation (Hail, 2013; Der Zahn, 2022) and is associated with high stakeholder engagement (Stuart et al., 2023). Sustainability depends on firms’ transparency regarding the integration of social and environmental concerns into their strategies (Ostir, 2023). In this regard, the legitimacy theory is concerned with incorporating ESG factors in reporting (Liesen et al., 2015) because legitimacy is “a generalised perception or assumption that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs and definitions” (Suchman, 1995, p. 574). Additionally, business model-related disclosure is associated with the IIRC’s agenda, specifically in terms of addressing problems in IR (Tweedie, 2017). Therefore, to maintain legitimacy, satisfy stakeholders and comply with regulatory regulations, firms try to engage in carbon accounting and decarbonization practices (Juusola and Srouji, 2022).

To achieve n-ZBMs, firms must incorporate their transition plans into their routine operations. Furthermore, they must be accurate in reporting, specifically regarding Scope 1 (direct emissions), Scope 2 (indirect emissions from electricity and cooling consumption), and Scope 3 (all other value chain-related emissions) (Montgomery and Van Clieaf, 2023). However, the disclosure of human resources in IR is yet to be examined (Salvi et al., 2022). Therefore, to bridge this gap, this study designs a theoretical framework based on the existing literature by conceptualising IC with HDCs in sustainability transition. This study examines decarbonization practices and carbon accounting as tools to reduce carbon emissions using IR. Figure 1 presents the conceptual framework of this study.

In this study, we employed a transparent, scientific and reproducible SLR proposed by Tranfield et al. (2003). Contributing to the existing body of literature in the field, SLR examines the role of theories supporting our theoretical framework on IC, HDCs, n-ZBMs, carbon accounting and IR studies (Paul and Criado, 2020). This study utilised an integrated approach, combining both quantitative and qualitative data analysis strategies. According to Hardies et al. (2023), SLR is the most appropriate methodological choice for objectively and concisely capturing all available evidence regarding research questions on accounting research topics that have received limited attention. We decided to employ SLR to advance knowledge in the area under investigation by comprehensively understanding specific topics addressed within our theoretical framework. Therefore, this method enables a comprehensive interpretation of earlier scientific discoveries using previous findings and evidence along with new conceptual frameworks and lines of enquiry. According to Larrinaga and Stolowy (2019), accounting literature reviews, particularly adhering to a specific procedure such as SLR, are necessary to identify and delve deeper into underrepresented accounting research issues.

In this study, we assessed 229 articles from the Scopus databases and GS, published between 1990 and 2023, retrieving them from the disciplines of “business, management and accounting”, “social sciences”, “economics, econometrics and finance”, and “environmental science”. Scopus is one of the largest “peer-reviewed” databases worldwide, with approximately 22,794 active titles from 11,678 publishers. Compared with the Web of Science (WoS), Scopus contains more articles, as well as most of the publications listed in the WoS (Di Vaio et al., 2020b). We used GS to analyse the citations of additional works published in high-impact journals, ensuring that no relevant article was overlooked (Martín-Martín et al., 2017). These publications were selected because they disseminate theoretical or empirical research related to IC, HDCs, n-ZBMs, carbon accounting, and IR studies (Di Vaio et al., 2023).

After defining the research topics, we followed Hardies et al. (2023) and Di Vaio et al.’s (2023) systematic approach for conducting SLRs as follows: First, we searched through Scopus and GS using predetermined inclusion and exclusion criteria. After reading the titles and abstracts, we determined the relevance of the articles to our study, thereby creating a dataset. Second, we performed a bibliometric analysis on the identified articles, gathering quantitative data. Third, we manually analysed the content of the 229 articles (qualitative analysis), a methodology commonly employed by scholars to identify changing patterns in article and journal performance research elements and examine the intellectual structure of a specific area in the current literature (Donthu et al., 2021). Figure 2 presents the implementation strategy for the aforementioned data collection processes and reporting for all the SLR phases, providing insights into the identification, screening, and inclusion of pertinent data, including the preferred reporting items for systematic reviews and meta-analyses (PRISMA) flowchart (Page et al., 2021). We established the eligibility criteria for data collection, involving the screening of peer-reviewed journal articles, as these are deemed more reliable and influential than other authored sources (Lombardi and Secundo, 2021). Studies were collated by employing predetermined keywords in titles and/or abstracts and combined using Boolean operators (AND and OR). Initially, 833 papers published in eminent journals between 2000 and 2023 were identified using the following designated search terms in Scopus and GS:

1. Group 1: (intellectual capital) AND (carbon emission)

2. Group 2: (intellectual capital) AND (decarboni*)

3. Group 3: (carbon accounting) AND (human resource)

4. Group 4: (account*) AND (climate change) AND (intellectual capital)

5. Group 5: (account*) AND (decarboni*) AND (HR OR human resource)

6. Group 6: (carbon account* OR carbon-account*) AND (decarboni*) AND (climate change)

7. Group 7: (account*) AND (decarboni*) AND (climate change)

8. Group 8: (dynamic capab*) AND (climate change)

9. Group 9: (dynamic capab*) AND (intellectual capital)

10. Group 10: (dynamic capab*) AND (intellectual capital) AND (technology)

11. Group 11: (dynamic capab*) AND (environmental account*)

12. Group 12: (dynamic capa*) AND (reporting)

13. Group 13: (dynamic capa*) AND (decarboni*)

14. Group 14: (dynamic capa*) AND (carbon emission) AND (disclosure OR reporting)

15. Group 15: (dynamic capa*) AND (human) AND (business model) AND (climate change OR environm*)

16. Group 16: (intellectual capital*) AND (business model) AND (climate change OR environm*)

Duplicate and extraneous articles were discarded, resulting in 631 articles. The selected articles were written in English. Next, we meticulously examined the abstracts, analysed content and selected relevant publications based on our research themes. This process was derived from our individual work. We collaborated to identify deficiencies and discrepancies in the article selection process. These sequential steps yielded a final sample size of 229 articles.

The data collection methods used in a bibliometric analysis are crucial to determine the validity and reliability of the results. Additionally, ensuring reproducibility and generalisability necessitates the adoption of a systematic approach (Baas et al., 2020; Zupic and Čater, 2015). Therefore, to outline the bibliometric study’s key elements, we depict them in a flow diagram (Figure 2). These elements include the choice of database, search terms, search strings, inclusion and exclusion criteria, analytical and visualisation software, and bibliometric indicators.

Bibliometric and network analyses, encompassing publication and citation trends, the most popular keywords and source titles, the most prolific contributing authors’ institutions and countries, as well as keyword co-occurrence analysis, were conducted using the VoSviewer application version 1.6.19 (Van Eck and Waltman, 2014) and Microsoft Excel (Microsoft, Rochester, New York).  Supplementary material Appendix 1 provides a summary of the chosen articles.

After summarising the studies, the spatiotemporal characteristics of the data derived from the chosen publications were highlighted using bibliometric analysis to conduct advanced statistical and graphic categorisation tests. Bibliometric analysis consistently produces trustworthy results for a specified topic without potentially ignoring earlier works (Di Vaio et al., 2022). The results of the bibliometric analysis are as follows:

Table 1 lists the most prolific authors who have conducted research in fields of carbon accounting, green IC, HDCs, n-ZBMs and IR. Nancy Bocken (Netherlands) tops the list with ten documents, followed by Indra Abeysekera (Australia), Shinichir Fujimori (Japan), Jan Konietzko (Netherlands), and Detlef P. Van Vuuren (Netherlands), each with three documents.

Citations in research articles show how much an author has borrowed from the concepts, findings and content of other authors. Consequently, the number of citations a study employs determines its influence (Moed, 2006). Table 2 presents the most frequently cited authors and their corresponding articles. “Clarifying the effect of intellectual capital on performance: The mediating role of dynamic capability” by Hsu and Wang (2012) is the most cited paper in the selected database. In this study, we developed and tested a theoretical hypothesis describing how dynamic capability mediates the effect of IC on performance. The definition of IC in this study encompasses relational, human and structural capital.

The second paper on the list is Beattie and Smith’s (2013) “Value creation and business models: Refocusing the IC debate”. It identifies and discusses the conceptual linkages among IC, value creation and business models. The authors posit that resource-based, DC and strategic network concepts of competitive advantage in strategic management literature are effectively absorbed in the business model idea, along with IC literature. The third popular study is Bocken and Geradts’ (2020) “Barriers and drivers to sustainable business model innovation: Organization design and dynamic capabilities”, which highlights how organisational design affects DCs needed for business model innovation.

Thus, interestingly, while the first study establishes a link between IC and HDCs, the second and third highlight the links between IC and business model innovation and DC and business model innovation, respectively. Thus, analysing these three studies, as well as others from those most cited reveals the links between IC, HDCs, and business model innovation. These findings are consistent with our research objectives.

Bibliometric networks comprising several papers gathered using the text-mining function of VOSviewer 1.6.19 are presented in this section. Recent bibliometric investigations confirm these results (Marzi et al., 2017). The text mining technique maps connections between keywords by calculating their distances. The smaller the distance between two terms, the higher their relatedness with higher co-occurrences (Van Eck and Waltman, 2014). The keywords in our bibliometric study for the “author terms” analysis included those that appeared at least five times in the database. Manual selection was used to ensure data reliability. Keywords such as “content analysis”, “article”, and “research method” were eliminated. Accordingly, 59 of the 1,620 keywords were deemed relevant for the analysis. Based on the bibliometric analysis, we created a conceptual map showing the association between the database’s keywords. The size of the words in the graphical analysis reflects the number of keyword occurrences. A larger circle represents a higher number of occurrences of the chosen keyword. “Intellectual capital” (n = 60, 2.18%), “climate change” (n = 59, 2.14%), “dynamic capabilities” (n = 39, 1.42%), “sustainable development” (n = 28, 1.02%), “emission control” (n = 27, 0.98%), and “decarbonization” (n = 25, 0.91%) are the top six keywords, according to the statistics. Table 3 lists the most popular keywords used by previous authors. An overlay depiction of the keywords, categorised by a colour match, is shown in Figure 3 (a)–(e), displaying the relationship by colour and calculating the frequency index of the recurrence of words over time. Note that while the term “human” has strong links with keywords such as “air pollution”, “carbon footprint”, “global warming”, and “greenhouse gases”, it is also strongly linked to “intellectual capital”, “dynamic capabilities”, “environmental management”, “sustainable development”, and “circular economy” [Figure 3 (b)]. Figure 3 (d) enables us to decipher the strong link between “carbon accounting” with “climate change”, “human”, “decision–making”, and “decarbonization”. Furthermore, Figure 3 (e) reflects the ties among research related to IC, human capital, DCs and business model. The other two links in the same figure can be seen between “business model – business model innovation” and “business model – sustainable business”.

The detailed framework of the analysis conducted on 229 articles, based on year, authors, title, subtopics, aims/findings, and methodology is summarised in  Appendix 1 (supplementary material). The analysed articles have been categorised into 3 decades: 1990–2000, 2001–2010 and 2011–2023 to provide a comprehensive understanding of how various themes and interconnections have been addressed over each decade by scholars in the field of IC, focussing on HDCs, decarbonization, carbon accounting, and IR.

Years 1990–2000. Only one study published in 2000 stated that IC and intangibles provide a guideline for redesigning businesses to have positive environmental impacts by realising their social responsibility (Allee, 2000).

Years 2001–2010. Seventeen articles published during this decade were included in the database. The first article of the decade highlighted that businesses should align with environmental changes regarding technological innovation to achieve a sustainable advantage (Alexopoulos and Theodoulidis, 2003). Subsequently, Abeysekera and Guthrie (2004) introduced the concept of human capital in management and accounting. Later, Vuontisjaarvi (2006) focussed on human resource reporting and corporate social responsibility (CSR), revealing that the quality of reporting is not up to the mark and is at an early stage of development. Most of the research conducted during this decade was based on carbon emissions, CSR, IC, and HDCs to improve business practices (Bocken and Allwood, 2012; Ghanam and Cox, 2007). However, even at the end of the decade, there was lack of thorough investigation.

Years 2011–2023. Two hundred and eleven articles, published over the last decade, were selected using numerous search strings. During this decade, the authors began investigating these topics because of the severe climate change challenges faced worldwide. In 2012, scholars investigated the relationship between IC and knowledge management (Hsu and Sabherwal, 2012), IC and performance (Hsu and Wang, 2012), IC and HDCs (de Biazzi, 2012), as well as topics such as HDCs required to meet sustainable goals (Castiaux, 2012) and strategies to reduce carbon footprint (Bocken and Allwood). Subsequently, in 2015 a drastic change was observed in research related to IC disclosure and IR under the resource-based view and institutional theories (Melloni, 2015; Pan et al., 2015), as scholars began to focus on these popular topics. In the following year, Berrill et al. (2016) revealed that renewable energy resources could reduce GHG emissions, whereas Higham et al. (2016) suggested that policymaking could play a major role in emissions reduction. Haslam et al. (2018) found that carbon emissions could be reduced through decarbonization, promoting sustainability. Subsequent to 2018, Wendra et al. (2019) studied the relationship between HDCs and IC and the innovation performance of firms, but the concept of reporting was still missing. IR was mostly influenced by environmental and social factors and did not focus much on human capital (Beretta et al., 2019). Most authors have studied IR using IC (Santis et al., 2019; Terblanche and De Villiers, 2019). In 2020, authors found that IC can help firms gain competitive advantage through innovation adoption (Xiao and Yu, 2020), however, there are some barriers at the institutional, strategic and operational levels (Bocken and Geradts, 2020). In the following year, Trusova et al. (2021) revealed that the transition towards sustainable business models depends on innovative digital technologies (Bocken and Short, 2021), therefore, firms need to change their routine operations to deal with climate change (Hernandez-Chea et al., 2021). Subsequent to 2021, Charles et al. (2022) highlighted some actions and regulations for sustainability and Oshiro and Fujimori (2022) highlighted the role of hydrogen-based energy as an alternative for climate mitigation. Additionally, Abrudan et al. (2022) introduced green IC with green innovation by examining the role of green HDCs. Later, Li et al. (2022) also found a positive link between green IC and HDCs, leading towards environmental performance. Doorga et al. (2023) were the first to disclose a link between carbon accounting and net-zero emissions. Much more exploration is required in terms of the links between IC and HDCs towards n-ZBMs, with a focus on carbon accounting towards sustainability transition.

An SLR is a broad way of reviewing existing literature pertaining to specific areas to highlight issues unaddressed by previous researchers. A literature review helps (1) explore gaps and point out future avenues, (2) highlight the inadequacy of a theory or framework because of which it is insufficiently used in specific fields, and (3) examine overlooked theories or any other perspectives that misguide the existing literature (Hiebl, 2023). Bibliometric analysis is well-known for exploring and analysing large amounts of data to highlight specific underdeveloped and rarely touched areas in emerging fields (Donthu et al., 2021). Designing n-ZBMs is very important for firms in the current decade owing to global warming, wherein saving the environment and natural resources is a top priority. Therefore, to positively impact the environment, building technologically innovative competencies by firms is highly recommended (Ludeke-Freund and Schaltegger, 2023).

To answer RQ1, 170 articles were selected, highlighting different links between IC and HDCs for decarbonization practices under the lens of carbon accounting from different perspectives. The IIRC proposed framework interprets that an integrated report not only displays a firm’s stewardship financial capital but also its human, social and intellectual “capitals” (Paoloni et al., 2015). Therefore, creating a cost-effective roadmap for decarbonization practices requires aligning resources and IC with climate commitments, and carbon accounting plays an important role in fulfilling climate commitments (Doorga et al., 2023). A firm’s activities may negatively impact society and the environment. Reducing a firm’s negative environmental impact, such as its pollution factors, requires carbon accounting adoption (Luo et al., 2022; Sun et al., 2021). The literature urges firms to reduce their emissions by developing n-ZBMs. However, firms face serious challenges in implementing a sustainability transition. Therefore, they are trying to engage in innovation ambidexterity by exploiting their existing resources and exploring new ones (Farzaneh et al., 2022). However, HDCs must be combined with IC for firms to adopt technological innovation to have positive environmental impacts (Wu and Yu, 2023). Moreover, combining green HDCs with green IC can help increase firms’ green innovative outcomes, achieving legitimacy (Abrudan et al., 2022). In addition, firms are struggling to adopt decarbonization practices, including emission reduction, that is, carbon accounting and technology portfolios, to achieve the Paris Agreement’s goals (Oshiro and Fujimori, 2022).

Concerning RQ2, 45 articles were selected to study how HDCs help in adopting decarbonization practices under the lens of IR. Firms alone cannot create or maintain market value. External factors, such as economic and societal issues and internal factors, such as employees, stakeholders, suppliers, and customers collectively create firm value (Paoloni et al., 2015). Regulatory bodies and their policies to adopt decarbonization practices are gaining the attention of both stakeholders and firms. In this regard, a voluntary program, that is the International Organization for Standardization (ISO) 14,001 standard, introduced in 1996, has been increasingly adopted by firms worldwide to control emissions (Sam and Song, 2022). Human capital is a capable element that guides firms in their value-creation process. Moreover, human capital disclosure extends the scope of firms and provide investors with better opportunities to evaluate disclosure policies regarding a firm’s performance (Raimo et al., 2020). Therefore, while IR plays a vital role in improving the disclosure of intangibles (Badia et al., 2019), it is considered an important climate change fighting measure, as it justifies stakeholders’ needs regarding adopting decarbonization practices (Bigerna and Polinori, 2022; Leschhorn, 2022; Linton et al., 2022). IR is gaining much attention from external stakeholders, as they want transparent internal stakeholder-related information for future investments (Abeysekera and Guthrie, 2004). Moreover, although NFD is closely associated with HDCs, firms’ performance can only increase if firms adopt suitable strategies, pursuing sensing-seizing-reconfiguring capabilities, such that it improves corporate performance (Yang and Yang, 2022).

In terms of RQ3, the 17 articles selected stressed the need for firms to develop sustainable business models using IC and HDCs. Firms are a major cause of environmental problems; however, depending on their use of natural and renewable energy resources, they can contribute to saving the planet (Boso et al., 2022). According to previous literature, firms can treat IC as a door that opens numerous ways to acquire technological innovation and design sustainable business models to achieve competitive advantage. Firms require to properly implement their IC strategies to sustain their sustainable competitive advantage (Xiao and Yu, 2020). Moreover, IC positively impacts the environment and can increase firms’ performance by justifying societal pressures (Li et al., 2022), whereas under institutional pressures, firms are forced to use their HDCs to show more sustainable performance to meet environmental challenges (Jain et al., 2022). Firms’ human, relational, and structural capital can serve as positive signals to start sustainable business models (Nigam et al., 2021). Moreover, IC aims to affect sustainability in the triple bottom line to develop circular economy business models (Minoja and Romano, 2021). Some authors state that the designs of sustainable business models will be insufficient until firms address environmental and social issues by developing multiple initiatives, such as environmental, human and economic resource exploitation (Bocken and Short, 2021). Farzaneh et al. (2022) highlight that IC with ambidexterity encourages knowledge practices to align to develop firms’ HDCs.

Based on our analysis, we propose a conceptual framework for “IC and HDCs for n-ZBMs toward sustainability transition’ for firms (Figure 4). The framework will enable firms to develop the best strategies for using their existing human resources with the help of IC and HDCs. The resource-based view and ambidexterity theories focus on the increased use of internal resources to gain competitive advantage over competitors. This allows firms to compete in today’s challenging environment by focussing on stakeholder needs and institutional pressures, enabling them to understand their responsibility towards the environment and society for sustainability transition by maintaining their legitimacy.

Our conceptual framework elaborates the role of carbon accounting and IR as measures to reduce carbon emissions and increase NFDs for decarbonization processes. The adoption of green technologies and renewable resources can help firms move towards a sustainability transition in response to institutional pressures and stakeholder expectations. However, high adoption costs represent a significant barrier to this transformation (Ahmed et al., 2021). We focus on the ambidexterity, institutional, legitimacy, resource-based view, and stakeholder theories to support firms to focus their existing resources, specifically human capital, which is a connection between HDCs and IC, to create competitive advantage for themselves in this competitive era. To operate in such challenging environments, firms must prove their legitimacy by responding to stakeholder concerns towards adopting IR and carbon accounting tools under the lens of legitimacy because both can improve their reliability (Pitrakkos and Maroun, 2020). In the first phase, firms must meet environmental challenges to maintain their legitimacy by adopting decarbonization practices in their routine activities to minimise their negative impact on society. In the next phase, using resource-based view and ambidexterity theories, firms must best utilise their existing resources and adopt renewable resources and green technologies to meet the requirements of institutional bodies. Meanwhile, they are encouraged to meet their stakeholders’ needs by incorporating efforts towards reducing carbon emissions through IR. Thus, by communicating progress towards net-zero targets and engaging stakeholders in the transition process, firms prioritise transparency and engagement. Finally, firms can collectively implement all these steps by designing sustainable business models. Ensuring accountability in the top rung of the management is pivotal for innovative performance towards net-zero targets. Strategic management efforts align corporate growth strategies with net-zero targets and involve top leaders and managers in sustainability efforts. Their impact and advantages can be expanded by involving employees, suppliers and partners in sustainability initiatives. Thus, through HDCs, firms can bridge the gap between strategic management and innovation performance (a dynamic framework). By implementing these strategies, firms can not only contribute to the global transition to net zero emissions, but also potentially gain competitive advantages and attract sustainability-valuing customers.

Firms face severe challenges in adopting decarbonization practices. Considering the importance for firms to adopt these practices to gain competitive advantage, this study conducts a bibliometric analysis to enable researchers to develop academic fields and raise questions for practitioners to focus on. In the current competitive era, firms are striving to achieve sustainable development through routine activities, making it essential for them to engage in sustainable value-creation processes by developing n-ZBMs. Designing n-ZBMs require the adoption of green technologies and renewable resources, which positively impact firms in meeting institutional needs and stakeholder demand through IR. While regulatory bodies require proper policy design to meet transition goals, n-ZBMs help firms preserve the environment by contributing to carbon emission reduction and enhancing NFD reporting quality. Firms must adopt carbon accounting tools and decarbonization practices to deal with climate change. By linking IC with HDCs, this study emphasises that the firms should make use of their human capital at their highest potential to enjoy their dynamic capabilities.

First, this study stresses on the existing gap in the literature, which is that although carbon accounting is helpful in adopting decarbonization processes to reduce climate change, there is insufficient studies directly linking it to IR, which is important for sustainability transition. This study contributes to the literature by revealing that it is important to focus on human capital, as it links both carbon accounting and IR, meeting institutional and stakeholders’ requirements. Second, this study explores the relationship between IC and HDCs in terms of IR, which can lead towards sustainable development in terms of firms’ legitimacy. Therefore, firms are restricted from having a keen interest in aligning their business activities with institutional pressure. This study focusses on IC and HDCs in decarbonization processes to achieve n-ZBMs, information on which is scarce in the literature. It increases the understanding of IC and HDCs by providing information on the use of green technology and renewable resources to minimise carbon emissions, thereby, adding knowledge to the research area. Moreover, it asserts not only the environmental impacts of firms’ operations but also their social aspects.

The transition towards n-ZBMs is very challenging. Revamping firms’ activities by adopting decarbonization practices is time consuming (Glynn and Cooper, 2022). Therefore, management should evaluate their future position when competitors have transition goals. They cannot risk relying on their current situation. Management must consider their obligation to transition. Therefore, firms must adopt n-ZBMs depending on their carbon accounting practices reducing their carbon emissions. This requires managers to incorporate strategies, implementing decarbonization practices to achieve sustainability transition, which can help them achieve their climate-stability goals. As carbon accounting can help IR, managers should design business models, adopted at the corporate level and communicated through the chain of command to better respond to climate change and fully utilise their IC and HDCs. Human capital is an important pillar for firms to achieve their goals. Therefore, managers should encourage training programs for human capital involved in decarbonization processes. IC with HDCs can enable firms sustain their performance in an external environment, addressing climate change challenges.

Firms are pressured by institutional forces to adopt and implement n-ZBMs to achieve sustainability transition to save the environment by minimising their carbon emissions. Therefore, firms are trying to re-route their functions through the decarbonization process by adopting green technology and renewable resources, which will help them in the future in financial profits and societal acceptance. In this regard, regulatory bodies such as policymakers, reporting standard-setting bodies, the government and non-governmental agencies should help firms face these environmental challenges by helping them identify innovative ways to do so.

This study finds that with IR’s help, carbon accounting can meet environmental challenges for sustainability transition, and that renewable energy resources and green technology are important pillars for decarbonization practices in the design of n-ZBMs. Based on RQ1, we develop the following propositions:

Firms should use resources to achieve their goals. Their performance is positively associated with environmental performance because of which they must comply with the environmental regulations designed by regulatory bodies. Thus, firms should improve their environmental performance by integrating their human capital with HDCs (Li et al., 2022).

Incorporating decarbonization practices is key to reducing climate change. Firms must align their routine operations according to the regulations and policies designed by regulatory bodies and institutions (Luo et al., 2015).

Based on RQ2, the following proposition is proposed:

IR helps firms move towards sustainability transition. Furthermore, it helps them integrate capital resources to add value to their financial and sustainable performance (Busco et al., 2021). HDCs also encourage decarbonization practices by promoting technological advancements.

Finally, with reference to RQ3 and based on the existing literature, we develop the following proposition:

Firms that maintain HDCs are not only eco-friendly, but also more innovative in enhancing their performance (Teece, 2007). Thus, firms must adopt carbon accounting in the future to protect the environment from its own negative impacts.

This research faces several constraints. First, Scopus and GS data undergo frequent updates, leading to fluctuations in the count of articles and citations they encompass. Further, the indexing process in Scopus is not perfect. Although the database claims to use state-of-the-art technology to match citing references and cited articles, there can still be errors or inconsistencies. This is because the database relies on algorithms to identify and link documents, which may not always be accurate. Additionally, the database includes web pages and patents, which can further complicate the indexing process (Valenzuela-Fernandez et al., 2019). Next, VOSviewer software version 1.6.19 was employed in this study to construct and formulate bibliometric networks. A cautious analysis of outcomes in conjunction with expert opinions is the most effective approach for interpreting bibliometric network visualisations. Validation of the authors’ thematic evaluations could be achieved through the application of more advanced tools like CiteSpace, capable of automatically labelling clusters using titles/keywords/abstracts. Additionally, scientific mapping and profiling methodologies are quantitative techniques utilised for analysing diverse publications, providing a comprehensive overview of the research domain and facilitating an in-depth exploration of specific subject areas.

The practice of keyword co-occurrence analysis (co-word analysis) is subject to specific limitations. Furthermore, certain publications might be inadequately represented in bibliometric databases. The quality of the co-word evaluation is determined by the indexing systems, with the authors having limited control over this (Di Vaio et al., 2022). Consequently, forthcoming research endeavours should adopt a systematic approach that integrates both quantitative and qualitative methods.

The authors would like to thank the editor-in-chief, associate editor and reviewers for handling the manuscript, providing helpful comments and suggestions, which led to improving the article.

Funding: This work was funded by University Parthenope, Naples, Italy, (No. DM737/2021) - Research Financial Resources, “Ministero dell’Università e della Ricerca con Decreto Ministeriale del 25.06.2021 n. 737 for research project entitled Transizione digitale per Modelli di Business Sostenibili e Resilienti nell’interfaccia nave-porto verso l’Agenda 2030 – P.I. Prof. Dr. Assunta Di Vaio”. This work is an outcome of the “Blue Shipping & Cruise Lab” (BSCLab), Department of Law, University of Naples Parthenope, Naples, Italy.

The supplementary material for this article can be found online.