The scale of industry clusters and their significant environmental impact make addressing environmental strategies on the cluster level an intriguing task. Although several studies indicate that upstream processes contribute significantly to the total environmental impact of the system, few studies assess how environmental strategy development can be approached from a life cycle perspective. The aim of this paper was to investigate the practical significance of life cycle-based environmental strategy development using a chemical industry cluster in Sweden as the case study. To assess the environmental impact, a cradle-to-gate life cycle assessment (LCA) was chosen as the method, with the total annual production of the cluster in 2011 as the functional unit. To cover the whole value chain, the global warming potential for downstream processes was also estimated. The findings were linked to the cluster vision, which aims to reduce environmental impact by 2030. The results indicate that the cluster must focus on the whole value chain when pursuing the aim of producing sustainable products as environmental impact both upstream and downstream of the cluster accounts for a larger share than on-site processes. The assessment also enables distribution of environmental impact among incoming material streams, thus providing the cluster with decision support when introducing renewable and recycled materials. Additionally, the assessment supports strategy comparison and serves as a base case against which strategy opportunities can be evaluated. This study demonstrates that the life cycle approach has interesting potential to support industry cluster companies in their mutual effort to improve environmental performance.