Life cycle costing as part of a life cycle sustainability assessment of products: methodology and case studies

Purpose: Existing life cycle sustainability assessments (LCSAs) suffer from a lack of comprehensiveness, consistency and practical tools for implementation. A robust and operational methodology for LCSA of products was developed in which life cycle costing (LCC) covers the economic dimension. We aim to define a comprehensive LCC methodology not tailored to a specific type of product for the purpose of LCSA and test its applicability. Methods: Based on a literature screening, best practice and research needs are identified. Subsequently, a comprehensive LCC methodology is developed that (a) suits LCSA purposes, (b) explicitly addresses double counting, (c) is applicable to different stakeholder needs, (d) addresses externalities and (e) facilitates LCC. It can be used as part of the LCSA, but also stand-alone. The LCC methodology is applied in two case studies, one on the business-to-business (B2B) “beverage carton package” and one on the consumer product “outdoor wool jacket”. Results and discussion: To align specifically with the LCSA’s environmental part, guidance for an environmental LCC for a generic product was established. While providing minimum requirements, it also allows flexibility in terms of considering discounting or positive cash flows and thus the choice of the economic indicator, depending also on the defined goal and scope, and the chosen stakeholder perspective. Practical guidance on data collection and management is provided in the form of an extended cost breakdown structure and regarding the allocation of product-unspecific costs. Double counting within LCC and within LCSA is addressed. The methodology was applied in two case studies, quantifying the “total undiscounted value” (package) and “total undiscounted cost” indicators (jacket). A solution to communicating results containing confidential data and from different stakeholder perspectives was found for the jacket case. Confidentiality and the lack of publicly available data of sufficient quality prevented the sharing of the “package” results. Conclusions: An LCC methodology for use in LCSA is developed, and its applicability is tested in two case studies. Novelties concern the methodological consideration of different stakeholder perspectives, suggesting alternative aggregated economic indicators, the proposed cost breakdown structure as an economic inventory, guidance on allocation of product-unspecific costs and addressing double counting. Data availability, including confidentiality, and quality remain barriers to publishing LCC results.