Environmental assessment of two business models - a life cycle comparison between a sales and a rental business model in the apparel sector in Sweden

Report, 2020

This report presents and applies a new method for environmentally assessing business models from a life cycle perspective. The method is meant to be useful for companies to guide their business decisions toward decoupling of economic activity from environmental impact. The basis of the method is an integrated economic and environmental perspective and a functional unit based on profit is employed, after which Life Cycle Assessment (LCA) methodology is carried out. This Business Model LCA is applied on a Swedish company and their current business model (sales) compared to an alternative business model (rental). Jackets are chosen as the products to represent the business of the company. Results indicate that a company can achieve more decoupling by renting jackets instead of selling them, although the results are sensitive to some economic parameters (like rental efficiency and rental price) and to customer habits, which can significantly compromise the overall performance of the rental model. The central feature of the developed method is that, by coupling the economic and physical flows of a business model, it allows a company to directly see the impact of business decisions on their environmental performance and plan their activities accordingly.