Weaving a New Path: Rethinking Incumbents' Role in Sustainability Transitions Through a Multilevel Perspective

This study investigates how incumbent firms can actively foster sustainability transitions by strategically engaging across re-gime and niche levels when developing sustainable innovations. Drawing on an embedded case study of a leading Italian textilecompany involved in eight sustainable innovation projects, we identify four strategies—namely, Joining, Scouting, Engaging andBridging—that enable incumbents to develop transition capacity. Unlike conventional innovation efforts, sustainable innovationdemands longer timelines, broader stakeholder engagement and the ability to manage systemic complexity. Our findings chal-lenge the traditional multilevel perspective (MLP) view of incumbents as passive regime defenders, instead portraying them asdynamic actors capable of supporting niche experimentation and building bridges across levels. We show that incumbents lev-erage internal innovation labs, trusted intermediaries and direct partnerships with niche actors to explore, absorb and maintainradical sustainable innovations. Additionally, we highlight the crucial role of intermediaries who must engage with the niche toprevent reinforcing existing lock-ins. Even ‘failed’ collaborations generate valuable learning spillovers that contribute to organi-sational resilience and innovation capability over time. This study enriches the MLP framework by offering a more dynamic viewof regime–niche interactions and provides actionable insights for firms seeking to navigate the grand challenge of sustainabilitythrough proactive innovation strategies.