This study examines how institutional entrepreneurs in China’s aviation sector navigate the dual pressures of domestic carbon emission trading schemes (ETS) and the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Using qualitative case study methods, including 24 elite interviews with aviation executives, regulators, and carbon market experts, we analyse the role of China Southern Airlines (CSA) as a key actor in sustainability transition. Findings reveal that field-level contradictions, social legitimacy, and collective institutional entrepreneurship shape the adoption of carbon reduction strategies. The study contributes to aviation environmental and sustainability policies and institutional theory by highlighting the interplay between regulatory compliance and global sustainability norms in emerging economies.

Digital technologies are often portrayed as disruptive levers for decarbonisation, yet many digital green initiatives improve transparency and efficiency without redesigning how environmental value is authorised, coordinated, and appropriated. We address this puzzle by theorising green digital business model innovation as the evolution of venture-level configurations under multi-domain selection in policy-steered sustainability transitions. Building on the activity-system view of business models and on innovation-studies, we define business model radicality as coupled reconfiguration across content, structure, and governance rather than technology novelty alone. We further theorise a cross-domain convergence requirement: configurations are retained only when they align simultaneously with institutional role allocations, market interfaces, technological infrastructures, and ecological verification demands. A comparative longitudinal study of three blockchain-enabled initiatives in China’s energy-finance nexus shows that radical disintermediation is screened out early when any single domain withholds authorisation or credible settlement, whereas incumbent-compatible configurations are retained through sequencing, interpretive pruning, and boundary-spanning alignment work. The study contributes to innovation studies by treating business models as meso-level selection objects, sharpening configuration-level radicality, and explaining why digital green opportunities often remain incremental in regulated transition systems.