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Integrating Life Cycle Assessment, Monetised Externalities and Value Alignment for Strategic Reconfiguration of Circular Business Models: The Case of Smartphones

Year: 2025

Type: article

Abstract: ABSTRACT The smartphone industry faces sustainability challenges from greenhouse gas emissions and resource depletion to growing e‐waste volumes. Circular business models have been proposed as a pathway to address these issues, yet their adoption remains limited, lacking integrative assessment frameworks that connect environmental performance with business viability. This study develops and applies such a framework combining life cycle assessment, monetisation of externalities via the eco‐cost method and a structured value alignment score. Using primary data from Fairphone 5 as a case study, four scenarios with increasing levels of circularity are analysed: (S0) a linear business‐as‐usual baseline, (S1) extended use with moderate user‐led repairs, (S2) long‐life use with intensified user‐led repairs and (S3) a product‐as‐a‐service model based on manufacturer‐led refurbishment. The results demonstrate that all circular business models outperform the linear baseline in terms of both environmental impacts and monetised externalities. Incremental models that extend product lifespans through user‐led repair (S1, S2) yield significant reductions in greenhouse gas emissions (up to −46%) and eco‐costs (−36%). However, their strategic alignment is constrained by weakened consumer value propositions and original equipment manufacturing profitability. In contrast, a product‐as‐a‐service model (S3) achieves superior outcomes by internalising life cycle responsibility and aligning incentives with longevity and service quality, reflecting systemic reconfiguration of value logics. The study contributes theoretically by operationalising an integrated framework that bridges environmental metrics with strategic value dimensions to evaluate circular business models. Practically, it provides firms a structured tool for evaluating trade‐offs and advancing scalable pathways towards a sustainable circular economy.

Source: Business Strategy and the Environment

DOI: 10.1002/bse.70271

Authors: Philipp Rittershaus, Venkat Aryan, David Sánchez, Manfred Renner, Jens Poeppelbuss

Institutions: Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT, Fraunhofer Institute for Reliability and Microintegration, Ruhr University Bochum

Language: English

Topic: Sustainable Supply Chain Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Responsible consumption and production, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,480