Abstract
Manufacturing companies play an important role in ensuring more sustainable consumption and production patterns. The circular economy (CE) proposes a pathway for decoupling economic growth from environmental impacts, providing a fruitful route for more sustainable consumption and production. The CE can be targeted through circular business models (CBMs). Business model development from linear to CBMs should take care to avoid environmental problem shifting. Life cycle assessment (LCA) is a tool for evaluating environmental impacts and supporting transparency and accountability in the value chain. It can also be used to strengthen the link between CBMs and sustainable development. Findings from a systematic literature review show how LCA is currently used for CBM development. Variations in LCA designed to offset methodological limitations are seldom used. Several studies exclusively report climate change, failing to utilise one potential strength of LCA in CBM development: the avoidance of circular washing (i.e., implementing circularity that does not contribute to environmental sustainability). Lastly, a generic framework for applying LCA in CBM development to gain a competitive advantage is provided. Potential pitfalls and recommendations for each step of CBM development are also presented.