Beyond the life cycle: assessing business models for the circular economy through life-cycle-based methodologies

Abstract

Although Life Cycle Assessment (LCA) is widely used in the literature to quantify the impact of products designed according to circularity principles, the analysis of circular business models (CBMs) remains a niche topic. In recent years, some empirical studies have highlighted the urgency of addressing this issue; however, the literature remains fragmented, and a more structured approach is needed for further progress.

This paper aims to fill this gap through a systematic literature review of 60 studies that combine LCA and life-cycle-based (LC-based) methodologies with other methods to assess the environmental sustainability of CBMs. The findings reveal that most studies rely on conventional LCA, which is frequently combined with Life Cycle Costing (LCC) and other qualitative or quantitative methods. There is also growing interest in hybrid and emerging approaches such as Business Model LCA (BM-LCA). LC-based methodologies are often used to compare the environmental impacts of linear business models (BM) and CBMs or to guide the transition from linear BMs toward the design of new CBMs. Particular emphasis is also placed on adopting CBMs such as product service systems, CBMs that extend product lifespan or industrial symbiosis, rather than CBMs focused on using circular materials. A comprehensive coverage across a wide range of sectors emerges.

The study's implications are significant for both researchers and managers. For researchers, the review highlights the need for standardisation efforts to refine tools for assessing CBMs. For managers, the review offers an 8-step operational framework to conduct LC-based analyses for CBM implementation.