Revenue is the income generated from the sale of a Product output. It represents the monetary value received by an economic actor when selling products or services produced through their activities, and forms a fundamental component in economic and sustainability assessments.
In Life Cycle Assessment and Cost-Benefit Assessment contexts, revenue is not analysed in isolation but rather as part of a broader framework for understanding economic value flows. Revenue constitutes one half of the benefit equation in economic activities. According to welfare economics principles applied in LCA, benefits can be divided into two distinct categories: revenue and external benefits.
External benefits represent positive externalities that create gains in human wellbeing for other economic actors or society at large without being captured through market transactions. These are benefits that occur beyond the direct financial returns to the producer. Examples include improved public health outcomes from cleaner production methods, enhanced ecosystem services, or knowledge spillovers from innovation activities that benefit society broadly.
The sum of revenue and external benefits together constitutes the social benefit of an economic activity. This broader perspective is essential for comprehensive sustainability assessment, as it reveals the total value created by activities beyond what conventional market-based accounting captures through revenue alone. Understanding both revenue and external benefits enables decision-makers to evaluate the full economic and social value proposition of products and product systems.
In Environmental Life Cycle Costing (LCC), revenue forms part of the value added calculation for each unit process in a product's life cycle. The cumulative LCC result across the entire product system equals the final product price when all value-added contributions are summed.
