Annabeth Aagaard

Institutionalized environmental, social, and governance (ESG) regulation is reshaping how firms justify value, responsibility, and viability across industrial value chains. This paper examines how Corporate Sustainability Reporting Directive requirements enter business model innovation in SMEs embedded in five industrial value chains. Drawing on a 3‐year longitudinal qualitative study of 25 SMEs, the findings show that ESG was initially treated as an external layer associated with documentation, compliance, and customer demands. When translated into business model reasoning, ESG surfaced persistent tensions among economic, environmental, social, and governance logics. These tensions were frequently closed through sequencing, commensuration, deferral, and compliance‐oriented reasoning. Artifact‐mediated workshops were associated with moments of provisional copresence, while the wider analysis identified governance constraints arising from the separation of ESG responsibility and decision authority. Building on these patterns, the paper advances the abductively grounded proposition that assumptions embedded in dominant BMI frameworks may reinforce ontological closure under institutionalized ESG conditions. It introduces the E ² SG Flower as an analytically grounded paradox‐navigation proposition whose effects and transferability beyond the studied industrial value chains require further empirical validation.

The European Union’s decarbonization strategy relies on transparent and accurate climate data across value chains. Yet, existing sustainability reporting frameworks mainly target large companies, often neglecting small and medium-sized enterprises (SMEs). Although SMEs are largely exempt from mandatory reporting under recent regulatory simplifications, they play a critical role in Scope 3 emissions, which dominate the carbon footprints of larger firms. This paper presents two complementary, freely accessible digital tools designed to support credible carbon accounting. The first tool, Climate Compass, is a government-sanctioned tool that aligns with the GHG Protocol and has been used by >10,000 SMEs in Denmark to calculate Scopes 1, 2, and 3 emissions through a user-friendly interface. The second, a newly developed online cradle-to-gate life cycle assessment (LCA) tool, supports product-level carbon footprinting using open-source emission factor databases. The cradle-to-gate approach reflects typical SME production profiles and emphasizes embodied CO₂e from raw materials, transport, and energy consumption. Together, these tools enable researchers to effectively assess SMEs emissions in the value chain and thus support decarbonization while supplying reliable data to larger companies. The tool democratizes emissions analysis and supports regulatory and market demands and strengthens SMEs contribution to Europe’s low-carbon transition.

This chapter delves into the transformative influence of game changers on business model innovation, emphasizing the critical role of the business model as a strategic management tool for generating customer value and competitive advantage. Grounded in the seminal perspectives and contributions of key authors in the BMI field, it explores the multifaceted nature of business models as architectures of value creation, delivery, and capture. The chapter critically reviews the existing literature, highlighting the diverse interpretations and the lack of consensus on a definitive business model definition. It underscores the business model’s responsiveness to external environmental factors, technological advancements, demands for sustainability and circularity, demographic shifts, and grand challenges, illustrating its pivotal role in strategic agility and business model innovation. This discussion sets the stage for a deeper exploration in the following chapters of how the individual game changers are reshaping business models, urging businesses to adapt and innovate continuously in an ever-evolving landscape.

In the dynamic realm of global business and the pressing climate crisis, the need for sustainability transitions has become a pivotal catalyst for change, fundamentally reshaping the core tenets of companies’ business models. In this chapter, we delve into the notion of sustainability transitions and discuss the dynamic interplay between business models and the broader socio-technical contexts in which they operate. The chapter argues that sustainability transitions are a game-changing lens through which businesses can understand, respond to, and influence the changing world around them. This leads to reflections on the nature of so-called business models for sustainability transitions (BMfST), which might become a new breed of sustainability-oriented business models. The chapter concludes with illustrations of three categories of business models which represent antecedents of future BMfST, as well as a set of tentative principles for thinking about business model design catalysed by sustainability transitions.

The accelerating depletion of global natural resources and the resultant environmental degradation underscore the urgent need for a paradigm shift towards sustainability. This chapter delves into the concept of the twin transition (TT)—the integration of digitalization with sustainable practices—as a strategic imperative for businesses to address these challenges effectively through twin transition business model innovation. It highlights the European Commission's initiatives, like the European Green Digital Coalition (EGDC), advocating for this integrated approach. The narrative outlines four strategic archetypes for twin transition business model innovation, emphasizing the importance of dynamic capabilities and open innovation in leveraging value through cross-sector collaborations. It examines the micro (operational)-, meso (strategic)-, and macro (economic)-implications of these models, demonstrating how digital tools can optimize resource use and promote circular economy practices. Finally, we explore the managerial implications of advancing twin transition business model innovation and identify key research areas essential for comprehending the transformative impact of digital and sustainable practices on competitive advantage, resilience, and long-term sustainability.

This chapter delves into the transformative impact of AI on business model innovation, exploring how it redefines value creation and how it impacts nine common components of business models. It offers an in-depth examination of AI's role as a dynamic catalyst, reshaping strategic thinking and operational approaches within contemporary business landscapes. By presenting an archetype model, it delineates the strategic pathways through which companies evolve as they embed AI into their business modeling, underscoring AI’s significant role in crafting novel value propositions, value creation, and redefining traditional business models. The analysis ventures beyond mere technological integration to highlight the imperative of adapting business strategies in the face of AI advancements, offering insights into leveraging AI for enduring competitive advantage. This discourse aims to equip scholars and practitioners with the acumen to navigate the complexities of AI in business, fostering innovation that resonates with the modern digital economy's demands, while fostering sustainable growth and innovation.

The introductory chapter provides an overview of the purpose and aim of the book, and how it contributes to the ongoing development and discussions of ICT, 5G, and 6G. We also elaborate on who should read the book, and why and how we developed it. We introduce the structure of the book and provide a short presentation of each chapter.