The Business Model in Sustainability Transitions: A Conceptualization

The past decades have witnessed a growing scientific and public interest in the large-scale transformation towards sustainability. The ambitious targets of the 2030 Agenda for SDG and new environmental campaigns are putting pressure on policymakers and organizations alike. However, warning signals indicate the possibility to fall behind many targets with the current pace of transition towards sustainability. 

Essentially the conversation about sustainability transition focuses on technology policy and regulations in the complex societal system, where firms adopt a passive-reactive transformational strategy [1]. Policy regulations do not work well in isolation and may lead to incomplete conversation. It is evident from recent accounts of several massive civil unrest and protests in response to policy efforts to combat climate change [2]. The proper discussion requires the inclusion of firms’ perspective in the complex social systems and a shift in dialogue from the firm’s reactive to proactive transformational strategies. 

Firms can engage in sustainability through technological innovation and business model innovations [3]. However, the literature provides little evidence on how firms develop and implement non-technological sustainable business model (SBM) innovation to influence sustainability transitions [4, 5]. 

In this paper, IPACST researchers Roberto Hernandez Chea, Akriti JainNancy Bocken & Anjula Gurtoo, investigate the following question: 

How can firms contribute through their business model innovations in accelerating sustainability transitions? 

To answer this, we integrate the two concepts of the “sustainable business model” and “sustainability transition” and explain how a firm’s business model activities influence changes at the system or macro level. We provide a novel conceptualization (Fig. 1) by identifying and categorizing different innovative activities in a firm’s business model. Furthermore, we illustrate two cases to demonstrate the proposed conceptualization. 

Fig. 1. Business model activity system for sustainability transitions (Hernández-Chea et al., 2021)

The analysis highlights how firm activities contribute to sustainability transitions by starting with:

(A) Changes in firm’s practices, control in daily operations, conducting awareness campaigns, and experiment with collaborations to deliver values based on sustainable practices in the short run.

(B) Ensure sustainable value creation and value delivery in the medium term through the design of an interdependent network of the green supply chain and collaboration with stakeholders; internal and external organizational structures and, 

(C) Reaching industry and societal changes in systems through a shared vision and strategic dialogues among firms in different sectors to develop value propositions and leverage business opportunities for sustainability in the long run.

This study bridges a significant gap in the theme of sustainability and business. As a critical contribution to practice, we point out different challenges, guiding questions, and activities at various stages for guiding practitioners and managers to move towards sustainability over time. 

The full paper can be read here. 


[1] Kemp, R., Loorbach, D., & Rotmans, J. (2007). Transition management as a model for managing processes of co-evolution towards sustainable developmentThe International Journal of Sustainable Development & World Ecology14(1), 78-91.

[2] Last accessed on 22/05/21

[3] Last accessed on 22/05/21

[4] Inigo, E.A.; Albareda, L.; Ritala, P. Business Model Innovation for Sustainability: Exploring Evolutionary and Radical Approaches through Dynamic Capabilities. Ind. Innov. 2017, 24, 515–542.

[5] Bidmon, C.M.; Knab, S.F. The Three Roles of Business Models in Societal Transitions: New Linkages between Business Model and Transition Research. J. Clean. Prod. 2018, 178, 903–916.