Firms' capability to develop sustainability-oriented innovation (SOI) can be enhanced by stakeholder engagement (SE) in order to acquire a wide range of external knowledge to support innovation efforts and outcomes. While we understand some of the transactional and relational attributes at stake for firms to leverage engagement with external stakeholders, we do not yet fully understand all the underlying mechanisms that are conducive to greater SOI outputs. At the same time, stakeholder theory emphasizes the importance of such engagement for firms' financial performance (FP), even though the related findings are far from conclusive. Therefore, this paper suggests and tests a mediation model to investigate the associations between SE, SOI and FP. Based on data collected from 101 mineral companies in Norway, the results show that both transactional and relational interactions are important for improving SOI outputs, and that SOI fully mediates the association between SE and FP (measured by profitability). This suggests that external engagement activities do not directly link to FP, and that the financial benefit begins to appear once a firm is able to transform the acquired knowledge from external stakeholders into innovative outputs. Such open innovation approach thus requires a sustainability orientation to ultimately materialize into a performance benefit.

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It is indisputable that achieving sustainability in the minerals industry requires a holistic approach to innovation that utilizes the breadth of knowledge found outside the industry. While providing a myriad of opportunities, this open approach to innovation would also be challenging in that companies need to have sufficient absorptive capacity, i.e. the ability to 'recognize', 'assimilate' and 'exploit' external knowledge when developing their processes and products. Despite recent theoretical advances, we do not yet fully understand the determinants of these three components of absorptive capacity for innovations aimed at sustainability. By employing a qualitative design with data obtained from 16 interviews conducted within Norway's minerals industry, this study explores the skills and routines that comprise micro-foundations of the capabilities for absorptive capacity. The analysis reveals that, in order to achieve recognition, companies need to firstly keep abreast of technological and market changes that emanate from sustainability transition, and secondly increase their awareness about social issues. Accordingly, assimilation depends on the established routines for facilitating dissemination of internal knowledge, whereas exploitation occurs by means of the piloting of innovative new solutions. This paper contributes to the sustainability-oriented innovation literature by demonstrating how companies in sustainabilitysensitive industries could benefit from various types of external knowledge in their innovation activities. It also provides some insights into the nature of open innovation and absorptive capacity beyond high-tech industries and research and development-based knowledge.

Minerals mining and processing companies (hereinafter referred to as "minerals industry") face the increasing demand for a comprehensive approach towards innovations aimed at sustainability. While the ability to learn from external sources of knowledge is at the core of this process, lack of geographical proximity and multiplicity of external sources impose challenges for mineral companies in this respect. The present study proposes that organizational, institutional and cognitive proximities could provide a platform for this industry to overcome those challenges, thereby achieving a superior innovation performance across various sustainability dimensions. Results of an analysis based on a sample of 101 mineral companies in Norway reveal that these dimensions of proximity are conducive to process, product and social innovation in different ways. More specifically, organizational proximity (diversity of non-local collaborations) and informal institutional proximity (shared cultural norms and values) spur social innovation. Furthermore, formal institutional proximity (similarity of rules and laws) and cognitive proximity (familiarity of knowledge base) support both process and product innovations. This paper provides some insights on the determinants of innovation in sustainability contexts, and contributes to the recent debate on the role of non-spatial proximity dimensions for innovation in the peripheral regions.