The Characteristics and Institutional Factors of Sustainable Business Models

Abstract

Abstract The need for sustainable business models (SBMs) has grown significantly in response to contemporary environmental and social challenges such as climate change. This article offers a literature review of the characteristics and institutional factors in the landscape of SBMs. We define SBMs as transformative models that yield positive impacts on the environment and society. It emphasizes the fundamental reconfiguration of how organizations create, deliver, and capture value. The literature review describes the characteristics of SBMs which attempt to balance profitability with the management of environmental and social impacts. We underline the relevance of stakeholder theory in the creation of SBMs in the context of the triple bottom line. Challenges in SBM adoption, such as organizational inertia, are also discussed. The circular economy model is a promising approach within SBMs, emphasizing product and material reuse in contrast to the linear take-make-use-dispose model. The alignment of SBMs with broader sustainability goals, corporate social responsibility (CSR) engagement, and proactive consideration of future regulatory changes would enhance the companies’ strategic advantage. The paper concludes by advocating the adoption of SBMs not just as a responsible choice but as a strategic imperative for long-term success, resilience, and positive social impact.