Sustainable development, and along with it, concepts such as corporate sustainability, corporate social responsibility, creating shared value and the like, has become a buzzword. The same holds true for terms like innovation and sustainable innovation, which have also become trendy terms on their own. In the traditional or conventional economic view, innovations, be they sustainable or otherwise, will be effectuated only if they contribute to creating shareholder value, irrespective of the societal value that is being, or might be, created. This means that, from a neoclassical perspective, creating societal value is a highly randomized and unpredictable process. But is that the case in reality? We seek to answer this question by applying the newly developed sustainable innovation framework. By reviewing the extant literature on sustainable innovation and examining practical examples, we provide our own definition of sustainable innovation, elaborate on the innovation compass and on different innovation spaces, and position them within the proposed framework. We conclude that the societal good of sustainable innovation is largest if sustainable innovations contribute to the economic transition towards a circular economy and the transition towards multiple value creation. The conventional economic regime is predominantly aimed at making things better through incremental – i.e., efficiency enhancing – innovation. We conclude that embarking on the transition towards a circular or sustainable economy requires that things are done differently through radical innovations, one of the most prominent being business model innovation.