Governance Arrangements for Local Sustainable Business Models: The Case of Local Energy Systems

Despite extensive research on sustainable business models and the development of various tools to facilitate their implementation, barriers persist particularly concerning the governance of a local ecosystem of actors. In this paper, we bridge the literature on sustainable business models with a literature stream on governance arrangements. We analyze these governance arrangements through a qualitative study focusing on the development of two local energy systems –anaerobic digestion and district heating– by a global energy company. Our study shows the importance of securing collaboration to govern interdependencies in the ecosystem. We identify that a facilitating public policy framework combined with internal institutional, strategic and operational drivers linked to the governance of local ecosystems is crucial for the implementation of local sustainable business models.