Abstract

Contemporary challenges, such as climate change and the digital transition, have highlighted the limitations of traditional governance models, often characterized by top-down decision-making processes. This article argues that achieving a just transition requires a new quality of sustainable innovation, and that traditional top-down innovation models are inadequate to address contemporary social, environmental, and territorial challenges. Instead, sustainable innovation must be co-governed and co-produced by public authorities, private actors, civil society, knowledge institutions, and communities. The article turns to the rise of sustainable impact finance and the growing emphasis on measurable, real-world impacts to show how this new focus can reshape incentives for both public and private actors. It then analyses how the European Union (EU) and Italian legal frameworks, governed by principles such as the partnership principle and the Italian principle of result, can be used to steer public administration toward impact-oriented, co-governance models, aligning policy and mechanisms. Cities emerge as important enablers of this transformation due to their connectedness to communities and institutional flexibility. Two case studies, Reggio Emilia and the Okobi initiative in Nigeria, illustrate how impact-driven multistakeholder partnerships can take form. The article concludes by identifying key challenges and outlining pathways to strengthen impact-based partnerships and advance a more inclusive, just and sustainable governance model of innovation.

TABLE OF CONTENTS

1. Introduction

2. The emergence of sustainable impact finance

3. A quest for a new quality of sustainable innovation in legal and policy frameworks

4. The interlinkages between the principle of result and the partnership principle

5. Impact-based multi-stakeholder partnerships: a new role for cities?

6. Reggio Emilia: a local laboratory for just sustainable innovation

7. Multi-stakeholder partnerships in international cooperation: lessons learned from the Global South. The Okobi initiative.

8. Challenges

9. Conclusion