Business Model Innovation for Decoupling: application of Market Shaping Strategies and Analysis with Business Model Life Cycle Assessment

Paper in proceeding, 2025

The concept of decoupling - dissociation of economic growth from environmental degradation - is generally considered a desirable development. Such a macro-economic development is dependent on changes in business models, which collectively make up the large-scale economy. Anticipating business models’ potential effect on decoupling is nontrivial. This paper approaches such an analysis from the perspective of Business Model Life Cycle Assessment (BM-LCA) and market-shaping, drawing upon literature on these two concepts and literature on sustainable business models.

BM-LCA can measure the environmental performance of business models, while marketshaping strategies are tools to alter market conditions to support some given market development. As such, market-shaping strategies could be employed to favour business models with better environmental performance, and potentially facilitate decoupling. This paper serves as a starting point to explore the relations between BM-LCA, market-shaping and decoupling. A combined BM-LCA and market-shaping approach to analyse business models’ decoupling potential is applied to three completed BM-LCA case studies, for sake of illustration. Lastly, an outlook for further research to improve the understanding of how business models relate to macro-level decoupling is presented.