Sustainability alliances (SAs) are increasingly recognised as a relevant hybrid governance mode for exploring sustainability opportunities (SOs) – ideas that simultaneously pursue economic, environmental, and social value, resulting in sustainable innovations and circular business models (CBMs). By pooling complementary resources, knowledge, and perspectives, such alliances can generate systemic solutions that exceed the capabilities of individual organisations, making them increasingly central to sustainability transitions.   

However, such alliances often fall short of realising SOs. Alliance performance – encompassing the two intertwined dimensions of relational quality (e.g., partner commitment) and substantive opportunity realisation (e.g., financial returns, emission reductions), is inherently difficult to achieve because goal and cognitive conflicts rooted in bounded rationality and opportunism can undermine collaboration. In sustainability transition contexts, the non-excludable nature of environmental and social value, the wickedness of sustainability problems, and the emergence of novel partner constellations make these inherent alliance conflicts particularly acute. Rich traditional alliance governance research offers valuable solutions but remains incomplete because it is grounded primarily in economic logics. Emerging SA scholarship offers valuable theorising on domain-specific managerial activities relevant to SA operation. However, it rarely adopts a governance process view that examines how firms select, form, design, and continuously operate alliances while addressing these compounded goal and cognitive conflicts, including the boundary conditions under which such governance supports the realisation of SOs. 

The dissertation comprises a cover essay and five interrelated articles exploring the process of SA governance to pre-empt conflicts and support the realisation of SOs. Employing a mixed-methods design, the research includes 11 in-depth case studies of Swedish manufacturing firms, a Q-method study with 25 stakeholders engaged in Sweden's transition to net zero emissions, and a literature review of academic studies. Empirical material includes 90 interviews with company representatives and 16 interviews with regulatory, research, NGO, and financial actors.

This thesis advances SA governance research by developing a governance process framework, thereby extending existing research on SA’s domain-specific managerial activities to explicitly examine conflicts threatening SO realisation, the responding governance mechanisms, and their boundary conditions. Moreover, it contributes to transition studies by advancing understanding of actor agency and detailing the governance process through which alliances help pre-empt unstable actor relationships – a recognized source of failure in broader innovation systems. Finally, it extends CBM research by viewing CBMs not primarily as a design challenge, but as embedded in alliance governance processes in sustainability transitions. For practitioners, this framework provides practical guidance on how to steer SAs in ways that reduces conflicts and, ultimately, support the joint realisation of SOs, while also recognising the limitations of such efforts.