Aligning product-service systems with environmental sustainability: Investigating the key role of revenue and pricing mechanisms

Product-Service Systems (PSS) have a potential to increase environmental sustainability, e.g. by extending product lifespan through multiple usage cycles or enhancing resource efficiency during the usage phase. However, the actual achievement of environmental benefits through PSS has been questioned, due to contradictions between business and sustainability logics. This paper advocates a stronger alignment between PSS and environmental sustainability, through the role of revenue models and pricing mechanisms, in order to move beyond environmental gains as mere "additional effects" of PSS. Based on a conceptual elaboration of the literature, the paper develops morphological boxes to link revenue and pricing mechanisms with environmental value drivers of different PSS types. It shows how diverse revenue and pricing mechanisms may misalign with environmental value drivers and suggests alignment criteria. It also explores innovative “pay-per-emission” revenue models and "emission-based" pricing mechanisms to achieve such an alignment. The proposed framework, presented as a morphological toolkit, includes a process model for practitioners and policymakers to assess the alignment of current and new PSS offerings with environmental drivers.