Dynamic capabilities and strategic reorientation towards decarbonisation in Baltic Sea shipping

Despite the challenges of decarbonisation faced by the shipping sector, this topic has rarely been addressed in sustainability transitions studies. This paper questions common views of established firms as agents resisting change and broadens discussions on the role of incumbents and strategic reorientation. Using the dynamic capabilities approach, we provide a deeper understanding of firms' strategic reorientation over time. Qualitative content analysis is applied to data from interviews, companies' reports and observations to address questions on how and why incumbent shipping firms in the Baltic Sea region reoriented towards decarbonisation in 2007-2018. We demonstrate that the engagement in decarbonisation has been a gradual process, characterised by a shift from reactive strategies to a mixed portfolio of integrated active and proactive innovation strategies. Although firms experiment with decarbonisation through alternative energy solutions, they simultaneously continue to devote considerable attention to less radical innovations such as increased energy efficiency.