Leveraging unique resources and capabilities to address ESG challenges: a qualitative study of high-growth Italian start-ups

In recent years, the issue of sustainable development, commonly defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Report, 1987, p. 43), ^[1] has become critical in the public debate and business contexts (Johnson and Schaltegger, 2020). As the global awareness of sustainable development continues to rise, many organisations are seeking to implement innovative strategies to develop sustainability in their businesses (Ordonez-Ponce et al., 2021; Sajjad et al., 2018) and to foster sustainable economic growth (Loucks et al., 2010). Thus, the future is inevitably headed towards sustainable innovations, and enterprises can no longer ignore this need.

In this context, environmental, social and governance (ESG) challenges are central, presenting complex yet urgent issues that require innovative solutions. Environmental challenges include reducing carbon footprints, managing resource scarcity and combating climate change. Social challenges revolve around promoting inclusion, equity, workplace safety and community well-being. Governance challenges focus on ensuring transparency, ethical decision-making, diversity and accountability in leadership ^[2]. These interconnected dimensions necessitate a multi-faceted approach, where businesses leverage their unique resources and capabilities to create value and address these pressing issues.

As stated by Murray et al. (2010), there is an emerging trend of companies recognising broader social and environmental issues and the role that corporate activity plays in this regard. Society expects entrepreneurs to behave ethically, contributing to economic development by improving the environment and people’s quality of life (Eweje, 2014). As a result, it is necessary for organisations not only to pursue profit goals (Acs et al., 2012) but also, and above all, to find creative solutions to face social and environmental challenges (Neumann, 2021) while simultaneously improving their social, environmental and economic performance (Hahn et al., 2015). To this end, it is important to analyse the characteristics and objectives of innovative organisations (Jo and Jang, 2022), which aim to drastically break with existing arrangements and contribute to the improvement of society (Geels et al., 2017) by helping to solve today’s social and environmental challenges (United Nations, 2017).

The resource-based view (RBV) theory offers a critical lens for understanding the unique resources and capabilities that enable organisations to achieve these goals. According to RBV, organisations with valuable, rare, inimitable and non-substitutable (VRIN) resources are better positioned to gain competitive advantage and respond effectively to sustainability challenges (Barney, 1991). This theoretical perspective underscores the importance of identifying and leveraging start-ups’ unique resources – such as innovative business models, technological advancements and entrepreneurial drive – to create value in the transition towards sustainability.

As suggested by Hockerts and Wüstenhagen (2010), in the seed stage of an enterprise’s transformation towards sustainability, high-growth start-ups are more likely than incumbent firms (i.e. companies that are market leaders in an industry) to pursue sustainable goals. Thus, high-growth start-ups contribute to presenting sustainability-oriented market innovations and networks, creating sustainability value and directing markets towards sustainable development (Johnson and Schaltegger, 2020).

High-growth start-ups are new enterprises with scalable and repeatable business models and an average annualised growth greater than 20% (Jo and Jang, 2022). Hence, they have the potential to grow quickly and increase their value exponentially (Eurostat and OECD, 2007). These start-ups’ very high potential (Wong et al., 2005) consequently generates high expectations (Valliere and Peterson, 2009) and can generate a very significant impact on economic welfare (Acs, 2010). As key actors in the introduction and diffusion of sustainability innovations to substitute for existing technologies, these organisations play an essential role in the transition to sustainability (Fichter and Clausen, 2021; Horne and Fichter, 2022).

Nevertheless, although many studies focus on high-growth incumbent firms (e.g. Audretsch, 2012; O’Regan et al., 2006) or on start-ups in general (Oliva and Kotabe, 2019; Rocha et al., 2019), the literature is lacking regarding high-growth start-ups and their unique resources and capabilities (Henrekson and Johansson, 2010). Moreover, despite the importance of high-growth start-ups for the economy, little attention has been paid to the role of high-growth start-ups’ initiatives in social and sustainable transitions and outcomes (Horne and Fichter, 2022; Neumann, 2022). Through a qualitative investigation targeting young entrepreneurs, founders and co-founders of start-ups in the Italian context, this study proposes to address these gaps by investigating whether and how high-growth start-ups led by young Italian entrepreneurs are using their unique resources and capabilities also as a means to address ESG challenges.

This study offers multiple contributions to research and practice. Firstly, to bridge the knowledge gap regarding the relationships between the economic, ecological and social pillars of sustainable development (Harlin and Berglund, 2021), the study aims at investigating sustainable start-ups to identify different leading ecosystems of sustainability (Tiba et al., 2021) and the potential for applying business models to promote social entrepreneurship (Da Silva et al., 2021). In particular, as suggested by Neumann (2022), it is important to explore these issues using qualitative methodologies so as to better understand sustainable orientation as a feature of the entrepreneurial environment (Da Silva et al., 2021) and the role that entrepreneurs’ behaviour plays in the creation of new enterprises (Neill et al., 2015). Moreover, as suggested by Kansheba and Wald (2021), this study proposes to investigate the current phenomenon by using micro- (individual-) level data focusing on a specific country (Prommer et al., 2020). Finally, future studies may yield valuable insights by examining the factors that stimulate enterprises’ sensitivity and contributions towards achieving the sustainable development goals (SDGs) (Bonfanti et al., 2022; Moya‐Clemente et al., 2020; Pomare, 2018). Given the importance of sustainability within the start-up landscape (Neumann, 2022; Tiba et al., 2019), more research has been called for to investigate this issue within the Italian start-up context (Del Bosco et al., 2021; Franceschelli et al., 2018). Thus, the research questions guiding this study is:

The rest of the paper is structured as follows. Section 2 provides a literature review. Section 3 outlines the research methodology. Section 4 presents and discusses the empirical results. Section 5 discusses the findings and their implications, acknowledges their limitations and suggests directions for future research.

Traditional entrepreneurship has focused primarily on economic development (Kirzner, 2015; Schumpeter, 1934), largely overlooking issues related to the environment and society (Sarango-Lalangui et al., 2018). Elkington (1998) first summarised the idea of sustainable business with the expression “triple bottom line”, encouraging entrepreneurs to operate in the business context through strategies and decisions that can simultaneously enhance the environment, the social context and economic growth. The recent emergence of sustainable development as an urgent issue further highlights that entrepreneurship should not focus exclusively on economic development (Terán-Yépez et al., 2020) but should be a vehicle by which economic sectors can achieve the SDGs (Apostolopoulos et al., 2018).

Indeed, recent studies have started to consider entrepreneurship as a solution to today’s environmental and social problems (Ordonez-Ponce et al., 2021) by establishing a new notion of entrepreneurial activity derived from sustainable entrepreneurship research (Anand et al., 2021; Shepherd and Patzelt, 2011), sustainability transition research (Burch et al., 2016; Markard et al., 2020; Rosenbloom et al., 2020) and social entrepreneurship research (Gupta et al., 2020; Rawhouser et al., 2019). In all these strands of entrepreneurship literature, social and environmental issues within the entrepreneurial world are placed at the centre of the debate (Loucks et al., 2010). This topic has attracted the attention of many researchers and practitioners, driven by the common goal of exploring the connection between traditional entrepreneurship, society and environment (Terán-Yépez et al., 2020). According to Schaltegger (2013), the objective of sustainable entrepreneurship is “to generate new products, services, production processes, techniques, and organisational arrangements that substantially reduce social and environmental impacts and enhance quality of life” (p. 2459). As these needs become more urgent, entrepreneurs are increasingly aware that they must include social and environmental issues in their business strategies to create a successful business that contributes to economic growth (Murray et al., 2010).

In this context, a clear understanding of sustainability is essential for high-growth start-ups, as they can serve as an important vehicle for the diffusion of sustainable innovations (Horne and Fichter, 2022) and as a concrete solution for today’s sustainability challenges (Tiba et al., 2021). As new entrants into the market, start-ups play a key role in the sustainability transition, as research on sustainable entrepreneurship highlights (Fichter and Clausen, 2021; Geels et al., 2017). Olteanu and Fichter (2022) introduced the concept of start-ups’ transformative capacity, referring to the resources, capacities and entrepreneurial orientation that enable start-ups to contribute to significant societal and environmental change by implementing transformation mechanisms. Indeed, in fields ranging from social inequality to environmental degradation, these organisations often turn their ideas into creative solutions that can reach many users, thus helping to move society towards sustainable development (Neumann, 2022; Terán-Yépez et al., 2020). According to Hoogendoorn et al. (2020), the motivation of start-ups to prioritise environmental issues over economic ones positively affects the creation of growth opportunities and the incentive to innovate. Thus, it seems clear that the implementation of a sustainable business model can be an important asset (Kalyar et al., 2020), enabling start-ups to create environmental, social and economic value (Terán-Yépez et al., 2020).

At least since Schumpeter (1934), economists have developed theories to investigate the relationships between entrepreneurship and innovativeness, economic growth and development (e.g. Griliches, 1957; Mowery and Rosenberg, 1991; Nelson and Winter, 1982; Schmookler, 1966). Focusing on the enterprise as a unit of analysis, a considerable body of research has examined entrepreneurship as a crucial factor for promoting innovation (Satalkina and Steiner, 2020) and fostering economic growth (Almodóvar-González et al., 2020; Stoica et al., 2020).

In this context, high-growth start-ups have recently attracted considerable attention from academics and policymakers due to their growing relevance within the entrepreneurial world and their strong impact on the economy (Coad et al., 2022; Jo and Jang, 2022; Ko et al., 2021).

High-growth start-ups comprise “all enterprises with average annualised growth greater than 20% per annum, over a three-year period” (Eurostat and OECD, 2007, p. 61). These new ventures are designed to grow quickly and scale rapidly based on certain characteristics (Kaufmann Foundation, 2016 ^[3]): they create up to 50% of new jobs; differ from other businesses because they expand not only in size but also in the number of new locations, creating new opportunities in different geographical areas; and increase the employment rate of related industries. High-growth start-ups are opportunity-oriented (Hyytinen et al., 2015) and are recognised for their flexibility, their innovative capabilities and their absence of formal routines (Gimenez-Fernandez and Beukel, 2017). These characteristics allow them not only to lead technological development but also to drive economic growth (Jo and Jang, 2022). As suggested by Griva et al. (2021), these new organisations have additional features in common, including an agile culture, innovation, resilience and human capital with adequate entrepreneurial skills.

For a start-up, it is not easy to survive and grow within the business environment (Sterk et al., 2021), and not all entrepreneurs aim to rapidly grow their businesses and dominate market segments. It is essential for a new venture to take appropriate actions to reduce the so-called “liability of newness” (Stinchcombe, 1965) to realise its strategic direction. Indeed, start-ups often struggle to survive in the seed stage (Cristofaro, 2017), but those that do survive strongly contribute to economic growth, employment and productivity, often disrupting industries with innovative ideas and projects (Haltiwanger et al., 2016).

High-growth start-ups are quite different from other types of organisations to which they have been compared in the literature, such as incumbent firms (Magnusson and Werner, 2023). Indeed, previous research tends to consider high-growth start-ups and incumbent firms as synonymous when discussing high-growth enterprises (Jo and Jang, 2022), thus failing to highlight any peculiarities related to different organisations with high growth rates. Although both types of organisations play key roles in increasing economic productivity and promoting innovation, they contribute to economic development in different ways, and their business models, organisational structures and endowed resources also differ (Gimenez-Fernandez and Beukel, 2017; Hölttä-Otto et al., 2013). Start-ups typically face greater responsibilities related to their newness and smallness than incumbent firms (Gimenez-Fernandez and Beukel, 2017). Because of their small size, these new ventures are generally characterised by a scarcity of human and financial resources, forcing them to look for external investors to develop and commercialise their innovative ideas (Hyytinen et al., 2015). Unlike incumbent firms, start-ups are not bound by rigid rules, administrative hierarchies or bureaucratic inertia (Jo and Jang, 2022), and this freedom enables them to develop radical and groundbreaking innovations.

Clearly, the sustainability dimension holds vital importance within the start-up landscape. Nevertheless, little is known about the link between sustainable development and neo-entrepreneurial activity (Serio et al., 2020) or about how start-ups can develop sustainable business models by leveraging their unique resources within the Italian context (Franceschelli et al., 2018), which is the focus of the present study.

The RBV offers a robust lens through which to examine the intricate relationship between high-growth start-ups and their sustainability endeavours. This theoretical perspective asserts that a firm’s competitive advantage and performance are fundamentally determined by the VRIN resources and capabilities it controls (Barney, 1991). This theory shifts the focus from external market conditions to the internal attributes of the firm, emphasising the strategic management of resources as a critical driver of success (Hart, 1995). Therefore, applying RBV to sustainability-oriented start-ups makes it possible to explore how their internal resources not only drive economic growth but also foster sustainable development and social well-being.

As stated above, the key dimensions of the RBV theory are encapsulated in the VRIN framework (Talaja, 2012), which stands for VRIN resources. Resources are considered valuable if they enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness. Valuable resources help firms exploit opportunities and/or neutralise threats in the external environment. Resources are rare when they are not widely possessed by other competitors. If a resource is valuable but not rare, it will not provide a competitive advantage because competitors can also access and use these resources. Resources are inimitable if they cannot be easily replicated or acquired by competitors. This inimitability can arise due to unique historical conditions, causal ambiguity (where the link between resources and competitive advantage is not clearly understood) or social complexity (such as company culture or interpersonal relationships). Finally, resources are non-substitutable when there are no equivalent alternatives that can be used to achieve the same strategy or outcome. If competitors can substitute a valuable, rare and inimitable resource with another that is equally effective, the original resource will not yield a sustained competitive advantage.

Therefore, high-growth start-ups are often at the forefront of sustainable innovation, thanks to their distinctive resource endowments. These can include cutting-edge technological assets, dynamic capabilities for rapid adaptation and innovation and human resources with unique knowledge and skills in sustainability practices (Horne and Fichter, 2022). The RBV framework can contribute to understanding how these resources serve not only as inputs for business operations but also as strategic assets that enable start-ups to develop and implement innovations that meet the triple bottom line of economic, environmental and social objectives. Beyond tangible resources, the RBV emphasises the importance of organisational capabilities in shaping a firm’s strategic direction towards sustainability (Darcy et al., 2014). These capabilities – including learning agility, strategic foresight and the ability to engage stakeholders – enable start-ups to navigate the complexities of sustainability challenges and to seize opportunities for sustainable development (Aragón-Correa and Sharma, 2003). High-growth start-ups often exhibit a high degree of flexibility and adaptability (Gimenez-Fernandez and Beukel, 2017), allowing them to quickly align their resources with emerging sustainability trends and regulatory changes.

While the RBV provides a valuable lens for understanding how start-ups can leverage their resources for sustainability, it also highlights the challenges they face, such as resource constraints and the need for strategic resource acquisition and development. By focusing on the strategic value of resources and capabilities, this framework underscores the potential of start-ups to drive significant societal and environmental change, reaffirming their role as key actors in the sustainability transition.

This study focuses on particularly promising young entrepreneurs in the Italian context, which has been characterised by an increasing number of start-ups in recent decades (Barboza and Capocchi, 2020). Although sustainability imperatives call everyone, this study focuses on young entrepreneurs, especially those exhibiting exceptional skills and innovative thinking, as they are often at the forefront of integrating sustainability into new business models. Their fresh perspectives and adaptability make them ideal candidates for driving change in traditional business practices, aligning them more closely with SDGs (Yacub et al., 2021).

The decision to focus on the Italian context is driven by several compelling factors. Firstly, the European Union (EU) has been a driving force in promoting sustainable development and innovation, emphasising the role of entrepreneurship as a key factor in achieving the SDGs (Brodny and Tutak, 2023). This is evident in various EU strategies and funding programmes that support innovation, sustainability and the growth of start-ups. One notable example is the EU’s “Horizon Europe” ^[4] programme, one of the most ambitious research and innovation programmes in the world. It emphasises the importance of sustainable development and the need for innovative solutions to tackle societal challenges (Robinson et al., 2021). This programme, along with other initiatives like the European Green Deal (Wolf et al., 2021), provides financial and policy support to start-ups focusing on sustainability. In response, the Italian Government has implemented policies and initiatives to foster an environment conducive to the growth of innovative start-ups, particularly those that align with the EU’s sustainability goals. Italy’s National Recovery and Resilience Plan (PNRR), ^[5] supported by the EU’s NextGenerationEU ^[6] funds, is a testament to this commitment. The PNRR includes significant investments in digitalisation, innovation and ecological transition, aiming to boost the competitiveness of Italian start-ups and encourage sustainable entrepreneurship (Bellandi et al., 2022).

In addition, Italy’s rich cultural heritage, combined with a new wave of entrepreneurial spirit, particularly among the younger generation, provides a fertile ground for examining how sustainability is being integrated into business practices. The country’s commitment to quality and innovation is translating into awareness, among a growing number of young entrepreneurs, of the importance of integrating sustainability into their business models (Serio et al., 2020). Therefore, this unique combination makes the Italian start-up ecosystem an interesting case study for exploring how start-ups can contribute to sustainable economic models (Migliaccio and Pavone, 2021).

This contribution specifically focuses on start-uppers and businesses that have been identified by Forbes ^[7], an American business magazine covering articles on finance, industry, investment and marketing. This study focuses on the fifth edition (2022) of Forbes’ initiative to identify the under 30 that are the most exceptional and promising in the Italian context. The Under 30 ranking aims to recognise the best young figures who have had a positive impact on society each year since 2018. This list has become a very important project for the magazine, focusing on many promising young individuals in fashion, sports, health, technology and finance who are changing our country by taking their brilliant ideas all over the world. Entrepreneurs, start-uppers, managers, artists, athletes and scientists who have courageously invested in their ideas to realise innovative projects are selected. These young people are contributing to a revolution in living, working and eating habits with their innovative and disrupting ideas. People like Billie Eilish, Emily Ratajkowski, Miley Cyrus, Afrojack and Camilla Cabello have appeared in various rankings over the years. The list in Italy comprises 100 young figures under the age of 30.

To answer our research question, we adopted a qualitative approach based on an organising framework with two main themes, namely, unique resources and high-growth start-ups, conceived as a starting list (Miles and Huberman, 1994).

Prior to starting the qualitative study, which was primarily interview-based, the research team reviewed the Forbes list to identify which of the 100 names would be suitable study participants. Names were excluded from this study if they were on the list because they were exceptionally notable in their fields (e.g. science, media, education or entertainment) but were not start-uppers. For this reason, well-known names in the music industry (e.g. Blanco and Rkomi) and in the field of sports (such as Matteo Berrettini) were excluded. The research team was able to determine which names to include and exclude for this purpose by conducting an extensive search of names on the Internet. In total, 52 names were excluded from the ranking of 100 Italians.

The remaining 48 names were contacted via social media, particularly LinkedIn, as well as the contact page of their companies’ websites. Of these, 41 responded favourably, 1 responded that they were not interested in taking part in the study, and the remaining 6 did not respond even after being contacted again. As a result, semi-structured interviews were conducted with 41 start-ups, including 46 founders and co-founders from different businesses. More criteria were set for defining the final sample following a first round of data collection with the founders and co-founders of the 41 businesses. The first round of interviews was formative in understanding the characteristics and objectives of these innovative organisations whose founders were listed in the Forbes ranking. Following the initial round of interviews, four businesses that were not start-ups were excluded. Thereafter, the final sample consisted of 42 entrepreneurs and 37 start-ups. To get a more in-depth understanding of the unique resources and objectives of the start-up, a second round of data collection was conducted. With this approach, it was possible to:

• have more faith in and awareness of the previously acknowledged findings;

• gather more data on the characteristics and sustainable orientation adopted by the company under study, even after time had passed;

• develop additional trust with founders;

• further confirm findings and strengthen the rigour of the methodology by speaking with new informants; and

• ensure that all the chosen start-ups were appropriate cases for the research objectives.

The mean age of the companies was 3.22 years (SD1.49), the mean age of the respondents was 26.55 (SD = 2.86) and 28.6% of the respondents were female. Table 1 reports the characteristics of the sample.

To answer our research question, we used a qualitative approach based on different sources to gain a deeper knowledge of the phenomenon under investigation. Qualitative research requires the adoption of a range of sources of information to reduce the impact of potential biases that may exist when consulting a single source (Bowen, 2009). Consequently, to allow the authors a comprehensive understanding of the companies under study, interviewees and informed actors were given access to archives and written data (e.g. company websites, organisational charts, company history, newspaper articles, company brochures, etc.).

The primary data for the study consisted of qualitative semi-structured interviews conducted both in person and via Meet (de Villiers et al., 2022a, 2022b; Molinari and de Villiers, 2021) with 42 (Co.) founders of the 37 start-ups. These interviews took place between August and September 2022, with 30 conducted via Meet and 12 conducted in person. One or two employees of several of the sample organisations were also interviewed as direct observers of the organisational dynamics in the start-up, which served to further deepen and enrich the data acquired. Internal informants who had worked for their companies for at least two years were selected. Interviews were conducted by two independent researchers, lasted about 2 h, and were recorded and transcribed within 24 h of conducting the interview so the data could be analysed.

The study’s methodology, which was based on the Gioia method of qualitative analysis (Gioia et al., 2013), was based on the following general research statement: “The authors aim to investigate whether and how Italian young entrepreneurs areing their unique resources and capabilities also as a means to address ESG challenges”.

To broadly address the issues being studied, both a semi-structured and an open-ended approach were used; examples questions included “What unique resources and capabilities does your start-up possess that help address ESG challenges?” and “Can you provide specific examples of ESG initiatives or practices your start-up has adopted?” These questions were asked as part of a larger research project geared towards identifying animal species (e.g. unicorns, zebras and gazelles) with which entrepreneurs identify. The complete list of semi-structured open-ended questions is included in  Appendix.

Additionally, the interviews explored the following main topics. Firstly, entrepreneurs were asked to identify and elaborate on the specific resources and capabilities that their start-ups possess. This included technological assets, human capital, innovative processes and partnerships that contribute to addressing ESG challenges. The interviews also examined how entrepreneurs integrate ESG considerations into their overall business strategy. Questions focused on the alignment of ESG goals with business objectives, strategic planning and decision-making processes. In addition, entrepreneurs were asked about their approaches to managing risks and identifying opportunities related to ESG factors. This included discussions on risk assessment methodologies, mitigation strategies and the identification of new market opportunities driven by ESG considerations. Entrepreneurs were questioned about how they measure and report the impact of their ESG initiatives. Topics included the metrics used for assessment, reporting frameworks and transparency practices. Finally, entrepreneurs were asked about the role of the broader entrepreneurial ecosystem in supporting their ESG efforts. This included discussions on the availability of resources, mentorship, policy support and collaborations with other stakeholders.

Between the two meetings, the researchers stayed in touch with the respondents via phone, email and text to build trust before upcoming interviews and ensure the accuracy of the data collected. They also used words and phrases that were typical in the cultural context of the informants to make sure that the questions were understood well and to help better jog their memory (Spradley, 2016).

Familiarisation with the data collected was a crucial part of the entire process, as it allowed the researchers to internalise the information and highlight the most important details for the data analysis. Therefore, the coding of data comprised three phases. The first phase focused on identifying recurrent themes that emerged throughout the interviews in relation to the participants’ responses. To conduct a thorough qualitative data analysis, the transcripts from the interviews were imported into Dedoose, an internet software application for qualitative analysis. A preliminary list of a priori categories was created in accordance with the pertinent literature to analyse the data (Miles and Huberman, 1994). Then, two researchers independently coded every interview that had been transcribed and subsequently compared personal codes by engaging in a discussion when disagreements emerged. The level of agreement between the coders was estimated using Cohen’s κ coefficient, a statistic for qualitative categorical analysis that evaluates inter-rater reliability, using an iterative approach (Locke, 2001) and continuously iterating between the data and the developing conceptualisations. The ultimate consensus was κ = 0.81, reflecting high agreement among the raters. In the second phase, we discerned patterns in the data with the aim of identifying concepts and relationships and formulating them in theoretically relevant terms, focusing our attention on new concepts that did not appear to have sufficient analogues in the literature. In the third phase, we were able to discover all the relevant first-order codes and second-order concepts, and we integrated them into one data structure (Figure 1).

The analysis of 42 interviews with founders and co-founders, interpreted through the lens of RBV theory, reveals that 85% of the young Italian entrepreneurs interviewed are leveraging their unique resources and organisational capabilities – such as adaptability, sustainability-oriented innovation and stakeholder engagement – to drive sustainable practices. The findings highlight several key themes regarding how these entrepreneurs use their resources and capabilities to address ESG challenges (Table 2).

A significant emphasis on environmental sustainability emerged from the interviews. Many start-ups are using unique technological resources and capabilities to innovate and implement environmentally friendly practices. For example, Respondent #11 described a proprietary technology that not only reduces waste but also transforms it into reusable materials, lowering environmental impact: “Our proprietary technology not only reduces waste but also transforms it into reusable materials, which significantly lowers our environmental impact”. This demonstrates how their inimitable resource – a patented technology – is directly aligned with ESG goals, showcasing a unique capability for creating circular economy solutions.

In terms of securing funding for sustainable initiatives, Respondent #33 elaborated on how their start-up accessed green finance:

The company used its adaptability and ability to navigate funding networks to identify and apply for specialised green finance programmes. This capability reflects a strategic approach to acquiring resources that align with long-term environmental goals.

Respondents referred on several occasions to the concept of green finance, which is part of the broader field of sustainable finance and mentioned financial instruments with which “environmentally sustainable” development is promoted – in particular, energy transition and the fight against climate change. Indeed, investors and financial institutions try to contribute to combating climate change by directing investments towards companies and projects with objectives related to energy transition and, more generally, environmental protection. It is no longer a matter of carrying out social responsibility actions; instead, it is necessary to act on business models – that is, on the logic of value creation. This focus on green finance illustrates how start-ups are not just passively managing resources but actively seeking to acquire and invest in new resources that align with sustainability goals. Through strategic resource management, including securing investments for energy transition and environmental protection projects, start-ups are building a portfolio of sustainable resources that enhance their competitiveness and market positioning.

Several other entrepreneurs highlighted the importance of integrating sustainability into core business strategies. Respondent #7 explained:

This statement underscores the strategic deployment of organisational adaptability and innovation as unique resources to address ESG challenges.

Companies tend to change their thinking to meet the needs of their customers and society at large, as noted by this entrepreneur: “It is the core business that has to be inherently sustainable. I often meet with my team, and we ask, ‘Does what we do help solve the great social and environmental challenges of our time?’ If the answer is no, we ask important questions—but not just for ethical reasons, but because it means that business will no longer be accepted, that the licence to operate will be lost” (Respondent #10). This reflects the critical role of entrepreneurial purpose and vision as intangible resources driving sustainability.

Thus, today’s innovative organisations seek to include environmental sustainability in an all-encompassing strategy consistent with business activity. Business can be said to be sustainable when it is able to find a solution to a problem, using resources that have a low or positive impact on the life of the planet and people. An entrepreneur explained:

Therefore, there is a concerted effort among start-ups to integrate sustainability into their core business strategies. This includes the use of sustainable materials, reduction of carbon emissions and commitment to long-term environmental goals. A founder remarked, “Sustainability is at the heart of our business model; every decision we make is evaluated for its environmental impact” (Respondent #37).

A second relevant theme is that of social factors. This concept considers how a company relates to the social environment in which it operates. Indeed, a socially responsible company aims at adopting a business development model that can generate a positive impact on the community. A company that integrates social sustainability into its core business will care about issues such as respect for human rights, attention to conflicts with the local community, workplace safety and health, gender equality, social justice, employee well-being and inclusion and rejection of all forms of discrimination. In the example below, an entrepreneur refers to the company’s attention to the company’s attention to workers:

This example illustrates how fostering a positive work environment and prioritising employee well-being are strategic resources that enhance employee loyalty and productivity.

Another founder reports on the company’s attention to gender equality: “We have a lot to do with technology, and I know that statistically similar companies with a significant female component are few: generally, you find more male workers than female workers in technology sectors. However, we set ourselves to have the same number of men and women and to work in groups with a homogeneous composition, because we know how much value women can generate for work activities” (Respondent #18). This deliberate effort to promote diversity reflects a strategic commitment to leveraging gender equality as a resource for innovation and collaboration.

Therefore, social sustainability practices, including respect for human rights, workplace safety, gender equality and community impact, can be understood as strategic assets under the RBV theory. These practices enhance a company’s reputation, foster employee loyalty and improve stakeholder relationships. All of these are critical, intangible resources that are difficult for competitors to replicate. By leveraging these unique social sustainability initiatives, companies can create a sustainable competitive advantage, demonstrating that social responsibility is not only an ethical obligation but also a strategic business decision.

A recurring topic in the interviews was sustainability reporting. Remarkably, many young Italian entrepreneurs emphasised the strategic role of this practice in enhancing transparency and trust. Respondent #27 provided insight into the importance of sustainability reporting: “The sustainability report we prepare is not only to satisfy a regulation but is also a strategic tool to identify possible areas for improvement and stakeholder requests”.

For instance, another respondent emphasised that sustainability reporting is not merely a compliance activity but a dynamic mechanism for aligning organisational goals with stakeholder expectations. It provides a platform for start-ups to communicate their contributions to sustainable development and identify areas for improvement. This transparency enhances brand value and trust, differentiating companies in the eyes of consumers, investors and partners. By leveraging sustainability reporting as a strategic asset, start-ups can build unique, intangible resources that are difficult for competitors to replicate.

In summary, CSR practices, including reporting, can be considered strategic assets for the start-up. They enhance a company’s reputation, foster employee loyalty and improve stakeholder relationships, all of which are critical for building a sustainable competitive advantage. The emphasis on these practices reflects how companies leverage and develop unique social and environmental resources, further demonstrating the strategic importance of integrating CSR into core business activities.

Finally, a third theme highlighted in all interviews is that of governance factors, which relate to how an organisation is managed. This theme is based on the idea that companies should take responsibility for the impact they generate. Governance focuses on issues such as executive pay, donations, political lobbying, tax strategy, board diversity, structure, bribery and corruption. Proper governance takes into consideration how boards of directors and management align with shareholders’ interests as well as those of the company’s community, value chains and customers. This is particularly important because a company’s governance provides outside observers with crucial insight into corporate identity. It is, therefore, necessary for governance to be guided by ethical principles such as fair compensation strategies, respect for meritocracy and minority shareholders’ rights, diversity policies and transparent decision-making by the management board. Proper governance is the basis of a corporate identity that can be perceived positively by stakeholders both internal to the structure (e.g. employees and shareholders) and external to it (e.g. investors, ESG rating agencies, etc.). Indeed, investors and financial institutions are encouraged to support governance inspired by ethical principles. One entrepreneur stated:

This demonstrates how governance, guided by ethical principles, becomes a critical resource in aligning internal and external stakeholder interests.

Respondent #1 provided further evidence of how ethical and compliance standards are leveraged to build a resilient corporate identity:

These statements underscore how adherence to strong ethical principles and compliance practices becomes a VRIN resource, enhancing trust and long-term viability.

Additionally, Respondent #12 highlighted how agility in governance supports rapid adaptation and sustainable initiatives:

The ability to adapt governance structures to changing demands is a unique capability that provides a competitive edge in sustainability-driven markets.

Another entrepreneur emphasised the role of governance in fostering innovation and resilience:

This highlights how governance structures can be leveraged as strategic resources to enhance organisational adaptability and innovation.

Thus, good governance practices – including ethical decision-making, diversity policies and alignment with stakeholders’ interests – constitute capabilities vital for sustainable competitive advantage. These capabilities enable start-ups to effectively navigate regulatory environments, mitigate risks and ensure long-term viability. By integrating these governance practices, companies can leverage unique organisational resources to build a strong reputation, foster investor confidence and create a sustainable competitive edge. This holistic approach not only strengthens the internal structure but also enhances external stakeholder relationships, contributing to the overall sustainability and success of the organisation.

This study seeks to investigate whether and how high-growth start-ups led by young Italian entrepreneurs are using their unique resources and capabilities to address ESG challenges. Through the lens of the RBV theory, the findings reveal that high-growth Italian start-ups strategically leverage distinct entrepreneurial and organisational resources to generate positive environmental and social impacts while effectively navigating governance-related complexities.

One prominent theme that emerged from the interviews is the significant emphasis on environmental sustainability. High-growth start-ups are using their VRIN resources to innovate and implement environmentally friendly practices. These resources include advanced technological assets that reduce carbon footprints, renewable energy initiatives and circular economy models. The focus on green finance also illustrates how start-ups are strategically acquiring and investing in resources that align with environmental goals. By doing so, they are not only contributing to environmental protection but also positioning themselves as leaders in sustainable practices, thereby attracting eco-conscious consumers and investors. The ability to secure and deploy resources for such initiatives underscores the strategic insight of these entrepreneurs in fostering competitive advantages.

Social sustainability emerged as another key dimension of the start-ups’ strategies. The findings illustrate how these businesses prioritise workplace safety, gender equality, community engagement and employee well-being. These practices are framed as strategic assets that enhance reputation, foster employee loyalty and strengthen relationships with stakeholders. For example, start-ups are actively building inclusive organisational cultures and leveraging diversity as a resource for innovation and resilience. Furthermore, the emphasis on sustainability reporting underscores a commitment to transparency and accountability. By using reporting frameworks as strategic tools, these start-ups identify areas for improvement, align with stakeholder expectations and communicate their progress towards achieving social sustainability goals.

Governance practices constitute the third critical theme. High-growth start-ups are implementing robust frameworks emphasising ethical decision-making, diversity and transparency. These practices ensure alignment between the interests of shareholders, employees and the broader community. The study highlights how governance frameworks are intertwined with innovation strategies, enabling start-ups to adapt quickly to changing market and regulatory demands. For instance, diversity in leadership and ethical governance practices not only foster creativity and resilience but also mitigate risks and enhance long-term viability. Entrepreneurs’ ability to integrate governance practices with strategic management of organisational capabilities is identified as a key resource for sustaining a sustainable competitive advantage.

Our results underscore the interplay between unique entrepreneurial resources (e.g. innovative capacity and technological endowments) and organisational capabilities (e.g. governance structures, operational flexibility and sustainability initiatives). By strategically managing these elements, high-growth Italian start-ups address ESG challenges while positioning themselves for long-term success. This alignment demonstrates how the RBV theory provides a valuable framework for understanding the strategic choices of young entrepreneurs in pursuing sustainability goals.

This study offers several contributions to theory and research. Firstly, it integrates the RBV theory with the concept of ESG challenges, demonstrating how unique resources and capabilities can be strategically managed to achieve sustainability goals. While the RBV theory traditionally focuses on the strategic value of resources in achieving competitive advantage, this study expands its application by showing how high-growth start-ups leverage their VRIN resources to address broader societal and environmental issues. This integration provides a more comprehensive understanding of how resource management can drive both economic performance and sustainable development. In other words, this research enriches the RBV theory by illustrating how the strategic management of resources can help meet ESG challenges, aligning with and extending the work of Barney (1991) and Hart (1995).

Secondly, the study contributes to the literature on high-growth start-ups by highlighting their unique position and potential in the sustainability transition. High-growth start-ups, characterised by their scalability and rapid innovation, are shown to possess distinct resource endowments that enable them to address ESG challenges more effectively than incumbent firms. This finding underscores the importance of considering the specific attributes of high-growth start-ups in theoretical models of sustainable entrepreneurship and resource management.

The study further elaborates on the dimensions of the RBV theory by providing empirical evidence on how intangible resources and organisational capabilities play crucial roles in shaping a firm’s strategic direction towards sustainability. These resources, while often overlooked in traditional RBV studies, are shown to be pivotal in enabling start-ups to navigate the complexities of ESG challenges. This expands the RBV framework to include a broader range of strategic assets that contribute to sustainable competitive advantage.

Moreover, we respond to Kansheba and Wald’s (2021) call to investigate high-growth start-ups by using micro- (individual-) level data focusing on a specific country (Prommer et al., 2020). Additionally, through qualitative research (Neumann, 2022), we have identified in depth the role that entrepreneurs’ behaviour plays in the creation of new enterprises (Neill et al., 2015) and we have provided an understanding of the reasons behind certain actions and decisions. Indeed, much of the existing research has focused on high-growth incumbent firms or on start-ups in general, although scholars suggest that high-growth start-ups continue to succeed and grow in the business context (Coad et al., 2022; Jo and Jang, 2022; Ko et al., 2021). Moreover, in line with prior studies that have shown entrepreneurship to be a solution to today’s environmental and social problems (Muñoz and Cohen, 2018), we have demonstrated that Italian founders consider ESG factors as the key point in the process of investment analysis and decision making, as they help measure the sustainability and social impact of business activities (Li et al., 2021).

In sum, our findings indicate that for the new generation of Italian entrepreneurs in Italy, sustainability is progressively being embraced as a fundamental aspect of organisational identity, transcending beyond the realm of mere strategic consideration. This shift reflects a broader change in mindset whereby sustainability is seen as integral to the business model. Young entrepreneurs are more inclined to start ventures that have a positive impact on society and the environment. For them, sustainability is a way to meaningfully connect with customers, employees and stakeholders. It is about building a brand that stands for more than just profits, with a focus on creating a legacy of positive change. This generational shift is making sustainability a core part of the organisational culture, driving innovation and shaping the future direction of Italian entrepreneurship.

It is also important to acknowledge the practical implications of the findings. The study suggests that entrepreneurs are increasingly recognising the importance of including ESG factors in their business operations. This insight is crucial for start-up founders and business leaders, who must consider how their organisations can contribute to solving environmental and social challenges while also achieving economic success. By focusing on sustainability, start-ups can differentiate themselves in the market. Such differentiation serves not only to reduce negative impacts but also to create positive impacts on society and the environment, which can appeal to a growing segment of eco-conscious consumers and investors. The findings underscore the importance of developing business models that are inherently sustainable. Doing so involves rethinking and innovating in ways that meet current needs without compromising future generations’ ability to meet their own needs.

For young start-uppers, integrating ESG factors early in their business journey can be a strategic advantage. They can build their company culture and operational strategies around sustainability, making it a core aspect of their brand identity. This early integration can attract like-minded employees, customers and partners who value sustainability. Experienced start-uppers, on the other hand, can leverage their established networks and resources to pivot towards more sustainable practices. They can re-evaluate their existing operations to identify areas for improvement and innovation in ESG practices. Their experience in navigating business challenges can aid in effectively implementing sustainable strategies that enhance long-term value.

For venture capitalists (VCs), the findings highlight the importance of supporting start-ups that prioritise ESG factors. VCs can enhance their portfolio’s resilience and long-term profitability by investing in companies with strong sustainability practices. They can also provide strategic guidance to start-ups on integrating ESG considerations, thereby increasing the overall impact of their investments. Other types of investors, such as angel investors or impact investors, can also play a crucial role by focusing on start-ups with a clear commitment to ESG principles. These investors can use their influence to promote transparency and accountability in ESG reporting, ensuring that their investments contribute positively to societal and environmental goals.

In this context, policymakers can play a significant role in fostering an ecosystem that supports sustainability-oriented entrepreneurship by providing targeted incentives and support for start-ups that prioritise ESG factors. Establishing clear guidelines and standards for what constitutes a sustainability-oriented start-up can help in measuring and recognising the efforts of these companies. In addition, policymakers could develop frameworks that encourage transparency in reporting ESG impacts, thus making it easier for stakeholders to assess the sustainability performance of start-ups. Also, encouraging collaboration between the public sector, private sector and academia can accelerate the adoption of sustainable practices among start-ups. Policymakers can also facilitate platforms for knowledge exchange, partnerships and mentorship programmes that focus on sustainability challenges and solutions. By investing in innovation hubs or clusters that focus on sustainability, governments can create environments where start-ups can thrive, innovate and contribute to the SDGs. These clusters can serve as testbeds for new technologies and business models that address environmental and social challenges.

For entrepreneurs, the study provides a roadmap for integrating sustainability into their business models, emphasising the strategic importance of leveraging unique resources and capabilities. Start-ups that effectively manage their VRIN resources and organisational capabilities can achieve significant societal and environmental impacts while also driving economic growth.

Policymakers, in turn, are tasked with creating environments conducive to these endeavours, ensuring that the innovative potential of start-ups is fully harnessed for the greater good of society and the planet. For example, integrating sustainability into educational programmes and entrepreneurial training can prepare future business leaders to prioritise sustainability in their ventures. To that end, policymakers can support the development of curricula and training programmes that focus on sustainable business practices and the importance of ESG factors. Finally, for entrepreneurs, this study provides a roadmap for integrating sustainability into their business models, emphasising the importance of ESG factors in achieving growth and societal impact.

While this study makes a significant contribution to the literature, some limitations are present that offer avenues for future research. Firstly, the size and the scope of the sample may restrict the generalisability of our results. For instance, it remains to be seen how well the assumptions can capture the business dynamics in different contexts and time periods. Secondly, further research should be conducted to determine how well the findings of this study account for different approaches by different generations to the business, economic and social goals to be pursued. An interesting future research direction in applying these insights could be to investigate the simultaneous presence of individuals of different age groups in top management and to explore the potential diversity of their approaches. In addition, larger-scale empirical studies are needed to statistically validate the findings. In particular, although this study focused on a large sample of companies of different types, it would be useful to examine a wider range of companies because those selected by Forbes may not fully represent the entire Italian business landscape. Furthermore, although this contribution responds to a call for more qualitative studies on this topic (Neumann, 2022), and despite the methodological rigour with which this study was conducted, a limitation exists in the inevitable subjectivity of the data due to respondents’ perceptions. Future research could verify these exploratory insights in a broader sample through surveys or different quantitative methods. The data suggest that it is possible to propose some new insights; however, more studies are needed to confirm and enhance these intuitions. Investigating the role of emerging technologies (e.g. AI, IoT and blockchain) in enhancing sustainability practices in start-ups could be a potential area for future investigation. This research could explore how technology is being used to solve specific environmental and social challenges. Finally, future research could delve deeper into the methods and metrics used by start-ups to measure and report their sustainability impact. This could include exploring best practices and challenges in sustainability reporting, ultimately contributing to the development of more effective and standardised sustainability assessment tools.

In conclusion, high-growth Italian start-ups are effectively leveraging their unique resources and capabilities to address ESG challenges, as evidenced by their innovative environmental practices, commitment to social sustainability and robust governance frameworks. By strategically managing their unique resources, these start-ups are not only achieving economic success but also making significant contributions to environmental protection and social well-being. This study underscores the potential of start-ups to drive the sustainability transition and highlights the importance of fostering an entrepreneurial ecosystem that supports sustainable development.

Focus area: unique resources and capabilities in environmental sustainability

• Can you describe the unique resources or capabilities your start-up leverages to address environmental sustainability challenges?

• How does your organisation integrate renewable energy or other sustainable practices into its operations?

• What role does your proprietary technology or innovation play in reducing your environmental impact?

• Have you engaged with green finance or sustainability-focused funding? If yes, can you elaborate on its impact on your environmental projects?

• How do you evaluate the environmental impact of your business decisions and operations?

Focus area: unique resources and capabilities in social sustainability

• How does your company address workplace safety and employee well-being?

• What steps has your organisation taken to promote gender equality and inclusion?

• Can you share examples of how your business contributes to the community or addresses social justice issues?

• What role does employee autonomy and organisational climate play in fostering productivity and satisfaction?

• How does your organisation measure the social impact of its initiatives?

Focus area: unique resources and capabilities in governance

• How does your company ensure ethical decision-making and transparency in its governance practices?

• Can you describe your approach to promoting diversity within your management and governance structures?

• What measures does your organisation take to align with stakeholder interests, including investors and the local community?

• How do your governance practices support innovation and adaptability in achieving ESG goals?

• What systems or processes have you implemented to ensure compliance with ESG standards?

Cross-cutting questions

• How do you perceive the interplay between environmental, social and governance factors in shaping your business strategy?

• In what ways do you believe your start-up’s agility contributes to achieving ESG objectives?

• How does sustainability reporting influence your organisational reputation and stakeholder relationships?

Source: Authors’ own work