Six Ways to Achieve Business & Environmental Benefits

(a) Integrating the environment into capital expenditure decisions (by considering environmental opposition to projects which could affect cas flows, for example)

(b) Understanding and managing environmental costs. Environmental costs are often hidden in overheads and environmental and energy cost ate often not allocated to the relevant budgets.

(c) Introducing waste minimization schemes.

(d) Understanding and managing life cycle costs. For many products, the greatest environmental impact occurs upstream (such as mining raw materials) or downstream from production (such as energy to operate equipment). This has led to producers being made responsible for dealing with the disposal of products such as cars, and government and third party measures to influence raw material choices. Organizations therefore need to identify, control and make provision for environmental life cycle costs and work with suppliers and customers to identify environmental cost reduction opportunities.

(e) Measuring environmental performance. Business is under increasing pressure to measure all aspects of environmental performance, both for statutory disclosure reasons and due to demands for more environmental data from customers.

(f) Involving management accountants in a strategic approach to environmental-related management accounting and performance evaluation.

a. To analyse the short-, medium- and long-term impact of possible changes in the followings:
i. Government policies, such as on transport
ii. Legislation and regulations
iii. Supply conditions, such as fewer landfill sites
iv. Market conditions, such as changing customer views
v. Social attitudes, such as to factory farming
vi. Competitor strategies


b. to identify possible actions:
i. Designating an “environmental champion” within the strategic planning or accounting function to ensure that environmental considerations are fully considered.
ii. Assessing whether new data sources are needed to collect more and better data.
iii. Making comparisons between sites/offices to highlight poor performance and generate peer pressure for action.
iv. Developing checklists for internal auditors.

(source: BPP Learning Media)



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