Sustainable business models: A review of current trends and future directions

Abstract

This shift from traditional, fixed competitive positioning to dynamic, digitally enabled models meant to position themselves strategically around great environmental fluidity has accelerated the change of business strategy between 2020 and 2025. This transformation does highlight the need of merging digital transformation with sustainable business models (SBM) as complementary organizational response to global disruptions. However, contemporary academic research illustrates those dynamic capabilities dealing with amid sensing, seizing and reconfiguring resources towards achieving sustainable competitive advantage, yet convergence socioeconomic profitability alongside social and environmental responsibility are the key to prosperous organizations today. The result of this new paradigm is the “twin transition,” where digitalization and sustainability meet to drive innovation through the principles of the circular economy (CE) and stakeholder engagement. However, as business innovation evolves from an internal-to-the-organization challenge to a multi-dimensional, ecosystem-based “wicked problem,” organizations face the dilemma of balancing the leveraging of existing (safe) strengths against pursuing those that seem promising but are uncharted territory. Looking forward, the frontier is strategic, where executives will adopt value-measurement frameworks that incorporates decarbonization and ESG dimensions into the DNA of business models.