The Twin Advantage: Leveraging Digital for Sustainability in Business Models

Abstract

AbstractThe 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.