With the increased concern over the impact that product and processes have on the environment several tools for environmental impact assessment have been developed. Life Cycle Assessment (LCA) is perhaps the most broadly known and used. The use of LCA is common in industry and there is a growing interest to improve the approach since several unresolved problems have been identified with its use. One important issue to resolve is the proper definition of the functional unit. The stated primary goal of the functional unit in LCA is to ensure comparability of LCA results; however, when reviewing the literature, LCA practitioners remark that comparing LCA studies is a very difficult task. The attributed reasons for this problem are the lack of standardized assumptions and practices, including the definition of the functional unit. Even though several unresolved problems present in LCA have had solutions proposed, a clear and actionable solution to the specific problem of functional unit definition is still not available. This paper will introduce system engineering and functional analysis concepts to the goal and scope definition phase of LCA in order to provide a framework for system definition, system boundary definition, and reference flows identification. System engineering principles and functional analysis have been extensively used to aid the design process, yet these approaches have not been effectively applied to the LCA domain. The benefits associated with the proposed framework include improved comparability of LCAs, dynamic updating of LCAs, and the integration of LCA into early stage product development.