The interrelated challenges of systematic degradation of ecosystems, social inequalities, financial instability and resource constraints are redefining the overall conditions for business in the twenty-first century. Addressing these challenges both demands and brings great opportunity for innovation. An important but sometimes neglected aspect of innovation is the design or redesign of business models. This has been identified as a greater source of lasting competitive advantage than new products and services per se. The majority of managers among those who say that their company´s sustainability activities have added to profits also say that these activities have led to business model changes. However, integrating business model design and sustainable innovation practices is a relatively underexplored area of research. The aim of this work is to develop an approach to business model design that supports the realization of sustainability-driven strategies. In this thesis, it is argued that a major barrier to sustainable innovation is the usual unawareness of an operational definition of sustainability and of guidelines for how an organization can support sustainable development while strengthening its own competitiveness. Therefore, a Framework for Strategic Sustainable Development (FSSD), which includes such an operational definition of sustainability and such strategic guidelines, is used as an overarching methodology for this work. Specific research methods include literature reviews, data collection, data and document analysis, explorative workshops and action research, mainly with partners in the district heating sector. To be able to design a business model that supports a sustainability-driven strategy, it is necessary to have, or to be able to develop, such a strategy. The literature review revealed that there is currently no business model design tool that in itself includes support for developing sustainability-driven strategies. However, as regards business model design as such, a tool known as the Business Model Canvas (BMC) is frequently referenced and by many seen as a kind of de-facto standard support tool for business model design. A combination of the FSSD (bringing the sustainability perspective) and the BMC (bringing the generic building blocks of business models) is therefore explored. Depending on the context it is necessary to also combine this with other methods and tools; in this work specifically with methods and tools for energy systems modeling and simulation. Both as a way to develop a combined approach and as a way to start validating it, a prototype of a handbook for sustainable innovation in the district heating sector was developed and tested iteratively. The use of early versions of this handbook preliminary indicates that the combined approach helps organizations to, e.g., self-assess their maturity in terms of strategic sustainability work, clarify strengths and weaknesses of current business models from a strategic sustainability perspective and generate of new solutions, including mutually supportive actions and business models within their wider value network.