State ownership and sustainability transitions: review and research agenda

State ownership, where a company is wholly or predominantly owned by a government, is making an impressive comeback in academic and policy circles as a means to address profound societal challenges such as climate change. The renewed interest in SOEs (State-owned Enterprises) is remarkable given the relatively recent perception of state ownership being backward, bureaucratic and inefficient. SOEs are highly relevant in the transition towards renewables in the energy and mobility sectors, yet knowledge of their contribution remains limited and fragmented. It has been estimated that SOEs control 60% of fossil fuel capacity and 64% of low-carbon capacity (Prag et al. 2018). Some empirical studies indicate SOEs are more inclined to invest in renewables than private firms (Steffen et al. 2020), but considerable ambiguity regarding sustainability contributions of SOEs remains (Wang & Jiang 2021; Argento et al 2019). To provide a novel and comprehensive perspective on the role of SOEs in sustainability transitions, and identify important knowledge lacuna, we conduct an interdisciplinary and integrative review. An integrative review is most appropriate for exploratory questions, where the researchers seek to gather insights from a variety of disciplines and perspectives (Whittemore & Knafl, 2005). We follow Turnheim & Sovacool (2020) and first select research traditions (e.g. political sciences), core papers in these traditions, and use the bibliographies of these papers to identify other relevant studies. Subsequently, we search Scopus for key terms e.g. ‘sustainability’, ‘State-owned’ for the period 2002-2022. Using thematic analysis, we synthesize current insights on SOEs and sustainability, and describe areas for further research and policy development. First, we develop a typology of SOEs distinguishing between degree of ownership, governance mechanism, and geographical scale. Second, we discuss the influence of firm-internal factors influencing the sustainability outcomes of SOEs, such as the orientation of firms towards multiple societal goals, and distinct socio-psychological profiles of managers of SOEs. Third, and uniquely, we discuss the systemic factors influencing the sustainability performance of SOEs. Beyond often identified external factors such as political institutions, we draw on studies in the field of sustainability transitions to assess the influence of other systemic factors such as links with universities. Fourth, we assess the different sustainability outcome measures used across disciplines, such as patenting, renewable energy investments, or CSR and ESG reporting. We also synthesize policy recommendations for steering SOEs towards sustainability actions. The findings indicate various important knowledge lacuna. New outcome indicators could help conceptualize the transformative, long-term potential of SOEs. Additionally, the development of governance and legal frameworks that facilitate functioning of SOEs (e.g. related to fair competition, rule of law safeguards or the prevention of leveraging SOEs for geopolitical interests), remain underexplored.