Assessing and evaluating CBMs through challenging LCC approaches

<div>The transition to Circular Economy involves rethinking of products, services, changes throughout the value</div><div>chain, and implementation of circular business models. Potential economic gains and cost savings from</div><div>circular business models have been mentioned as drivers to implement circular thinking within</div><div>organisations. However, companies still struggle in understanding the economic benefits and implications</div><div>associated with such a transition. To overcome this, metrics that provide economic information associated</div><div>with circular products and business models are needed. Life cycle costing (LCC) has been identified as a</div><div>potential economic quantitative assessment method. Through a systematic literature review, this paper</div><div>presents the strengths and limitations associated to LCC in assessing the economic implications of circular</div><div>business models.</div><div>The review recognised that LCC can provide a life cycle and multiple stakeholder perspectives, which are</div><div>relevant to overcome some challenges associated with the implementation and design of circular business</div><div>models. Furthermore, environmental and social LCC can include externality costs, which is an important</div><div>factor for Circular Economy. Nonetheless, there is a lack of empirical studies implementing multiple</div><div>stakeholder perspective and accounting for externalities. Several challenges were also identified: lack of</div><div>understanding of the cost implications of products/materials with multiple life cycles; difficulties in</div><div>allocating costs among multiple stakeholders; lack of data availability and low quality. These are relevant</div><div>issues for costing associated to circular business models and should be addressed in future research.</div>