Monitoring Sustainability Performance during the Use Phase of Product-Service Systems

Abstract: Circular economy (CE) is widely seen as a potential solution to negative impacts caused by thelinear economy; however, companies must integrate CE principles into the business modeldeeper to achieve sustainable development. The Product-Service System (PSS) businessmodel is a potential solution to the superficial implementation of CE due to shifting the focusto delivering functionality rather than ownership. However, several researchers point out thatPSS systems, whilst promoted as sustainability alternatives, rarely have enough quantitativedata supporting these outcomes and where the research field widely highlight the need tofurther develop assessment methods for PSS, with the use phase being a specifically criticalarea to monitor due to companies increased responsibility. This master’s thesis, therefore,aims to evaluate how companies monitor and assess their use-oriented PSS during the usephase to safeguard the intended increase in sustainability performance. To achieve theseobjectives, a qualitative, multiple case study was employed, where four companies wereinterviewed following a semi-structured approach, creating in-depth knowledge in each case. The case studies reveal that the different companies' primary methods to safeguard theirsustainability ambitions were through data collection, which, however, lacked the structuralsupport of Key Performance Indicators (KPIs). The different case studies could be seen tomainly collect performance data for proactive maintenance and consumer behaviour data toadjust their services and, by that, reduce environmental impact. However, only Volvo CarMobility did try to reduce the risk of unforeseen rebound effects by investigating customers'changed mobility behaviour. All of the companies did during the interviews refer to KPIs thatthey used to ensure that their sustainability goals were met; however, only one of the casestudies had an indicator that could meet the requirements of KPIs, whereas others lackedspecified targets, were vaguely defined or were irregularly collected. Additionally, the casestudies confirmed different strategic reasons for implementing their PSS other thansustainability and whether all sustainability goals could be connected to economic incentives.These different drivers confirm the PSS attraction and suitability for companies; however, italso emphasises the importance of implementing a system perspective to mitigate risks ofburden shifting and loss of the potential to contribute to sustainable development. Future research could further evaluate the importance of information and communicationtechnologies (ICT) when collecting data on PSS consumers, how AI-supported technologycould facilitate the recognition of consumer behaviour, and how this data collection shouldbe efficiently managed in the organisation. Additionally, another interesting avenue for futureinvestigation would be the overall consumer behaviour of society and its impact on businessmodels such as PSS. In conclusion, this master's thesis confirms and extends previous assertions on theimportance and complexity of use-oriented PSS and adds to the emerging literature on the subject through the information from the case studies. The findings also point to the holisticinsights and performance assessments required to optimise the potential and ensure thesustainability of the services.