Environmental cost accounting

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Environmental cost accounting is a concept developed in the 1990s that is used for planning, management and operations controlling in companies. Since then, numerous conceptual approaches based, for example, on process costing or the concept of " variable costs ", have been developed in order to enable broader application.

Definition

The conventional cost accounting is used to determine, document and analyze all in a predefined system (eg. As the entire organization or department) costs and the allocation of these to units, activities, processes or products. It examines contribution margins of individual products as well as income and expenses of the entire organization. The environmental cost accounting, on the other hand, deals with the recording of direct and indirect costs of operational environmental impacts with reasonable effort, the causal accounting and the consideration of their effect on the achievement of the operational goals. Operational environmental costs are understood here to mean costs that are caused by the environmental impact of the organization. They consist of environmental protection costs (follow-up and integrated environmental protection ), residual material generation costs (purchasing, transport and processing of problematic materials) and product costs.

In the environmental costs are both internal environmental costs (within the plant) and external environmental costs (outside the company) who do not close temporal reference must have for causing activity. Although often only costs are considered that arise internally through the actual, generally known and measurable pollution of the environment (e.g. wastewater tax law) or the reduction of environmental impacts (e.g. CO 2 offsetting), the modern understanding of environmental costs includes also all emission and residue-related material flow costs , including purchasing, personnel, depreciation and disposal costs.

Classification in sustainability management

With environmental cost accounting, companies or individual departments gain an insight into the exact amount of environmentally-induced costs and are therefore able to compare these costs with the corresponding income or services. Using the approaches of environmental cost accounting, cost reduction potentials can be determined with simultaneous environmental relief. This information supports the company management in making decisions about future activities of a company or department. Furthermore, the eco-effectiveness and the eco-efficiency of a company can be increased in many cases .

Limits and weaknesses

Environmental cost accounting based on conventional cost accounting is based on the past and does not make any statements about future developments. Like conventional cost accounting, it also has the problem of the plausible allocation of overhead costs to cost centers and cost units. From an environmental point of view, the insufficient consideration of external costs is to be criticized. Environmental aspects that have no direct financial consequences for the company are usually not taken into account.

Practical examples

Neumarkter Lammsbräu

As a medium-sized brewery (approx. 80 employees), Neumarkter Lammsbräu has been creating operational material and energy balances to optimize operational resource efficiency since the early 1990s. In 1996, an environmental controlling system was introduced in order to link operational material and energy flows with the respective cost flows. The full costs of Neumarkter Lammsbräu were around 8 million euros, of which 5.8 percent were “primary environmental costs”. Primary environmental costs are those costs that are directly attributable to the corporate objective of "environmental protection". The "primary environmental costs" are divided into environmental relief costs (costs incurred to avoid and / or reduce the operational resource consumption) and environmental pollution costs (denotes costs incurred due to the use of the environment for the operational service production process). In addition, an approach was developed to show the extent to which external costs can be avoided through the introduction of an ecological corporate policy. Information on environmental cost activities at Neumarkter Lammsbräu is published annually in the eco-controlling report.

Ontario Hydro

The Ontario Hydro is one of the largest electric utilities in North America with eight power plants using fossil fuels, twelve nuclear power plants and 69 hydroelectric plants. The company has been striving to quantify and evaluate external effects since 1974. As monetization approaches, the "willingness to pay" and the "willingness to accept" are at the center. From 1992 to 1999 employees of Ontario Hydro used their own cost accounting system in order to integrate external costs into the company's special accounting: the so-called “Full Cost Accounting” (FCA).

With the FCA, the internal and external (environmental) costs are linked to the environmental impact. Of the possible external effects, the five categories: mortality , consequences of disease, cancer cases, crop failures, damage to buildings were classified as relevant to the company's decision-making and integrated into the FCA model. Ontario Hydro realized that current potential external costs may become internal costs in the near future. The FCA was integrated into an overall corporate concept in order to take these aspects into account in the strategic direction. However, methodological problems in recording, quantifying and economically assessing environmental damage could not be solved by the FCA.

See also

literature

  • Federal Ministry for the Environment (BMU) & Federal Environment Agency (UBA) (ed.): Guidelines for operational environmental cost management. BMU / UBA, Berlin 2003. (UBA Berlin (PDF; 442 kB))
  • Federal Environment Ministry (BMU) & Federal Environment Agency (UBA) (Ed.): Manual environmental cost accounting. Vahlen, Munich 1996
  • Federal Environment Ministry (BMU); econsense (ed.); S. Schaltegger, C. Herzig, O. Kleiber, T. Klinke, J. Müller (authors): Sustainability management in companies. From the idea to practice: management approaches to implement corporate social responsibility and corporate sustainability. 3. Edition. BMU, econsense, Center for Sustainability Management, Berlin / Lüneburg 2007. (CSM Lüneburg (1.6 MB; PDF))
  • P. Letmathe: Environmental cost accounting. Vahlen, Munich 1998.
  • Thomas Loew, Klaus Fichter, Uta Müller, Werner F. Schulz, Markus Strobel: Approaches to environmental cost accounting in comparison. Comparative assessment of approaches to environmental cost accounting for their suitability for operational practice and their contribution to ecological corporate management. Federal Environment Agency, Berlin 2003. (UBA Berlin (1.34 MB; PDF))
  • K. Fichter, T. Loew, E. Seidel: Corporate environmental cost accounting: Methods and practical further development. Springer Verlag, Berlin / Heidelberg 1997, ISBN 3-540-62597-6 .
  • J. Fresner, T. Bürki, H. Sittig: Resource efficiency in production - reducing costs through cleaner production. Symposion Publishing, 2009, ISBN 978-3-939707-48-6 .
  • P. Rikhardsson, M. Bennett, J. Bouma, S. Schaltegger (Eds.): Implementing Environmental Management Accounting: Status and Challenges. Springer, Dordrecht 2005.
  • E. Seidel: Ecological Controlling - For the conception of an ecologically obligated person by and in companies. In: R. Wunderer (Ed.): Business Administration as Management- u. Leadership. Stuttgart 1995.
  • S. Schaltegger, R. Burritt: Contemporary Environmental Accounting: Issues, Concept and Practice. Greenleaf, Sheffield 2000, ISBN 1-874719-34-9 .
  • S. Schaltegger, M. Bennett, R. Burritt, C. Jasch (Eds.): Environmental Management Accounting for Cleaner Production. Springer, Dordrecht 2008, ISBN 978-1-4020-8912-1 .
  • Stefan Schaltegger, Roger Burritt, Holger Petersen: An Introduction to Corporate Environmental Management. Striving for Sustainability. Greenleaf, Sheffield 2003, ISBN 1-874719-65-9 .
  • S. Schaltegger, M. Bennett, R. Burritt (Eds.): Sustainability Accounting and Reporting. Springer, Dordrecht 2006.

Web links

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  1. ↑ E. Seidel: Ecological Controlling - On the conception of an ecologically obligated person by and in companies. In: R. Wunderer (Ed.): Business Administration as Management- u. Leadership. Stuttgart 1995, pp. 354-371.
  2. ^ S. Schaltegger, R. Burritt: Contemporary Environmental Accounting: Issues, Concept and Practice. Greenleaf, Sheffield 2000.
  3. ^ R. Burritt, T. Hahn, S. Schaltegger: Towards a Framework of EMA. In: M. Bennett, J. Bouma, T. Wolters (Eds.): Environmental Management Accounting: Informational and Institutional Developments. Kluwer Academic Publishers, Dordrecht NL 2002, pp. 21-35.
  4. ↑ K. Fichter, T. Loew, E. Seidel: Corporate environmental cost accounting: Methods and practical further development. Springer Verlag, Berlin / Heidelberg 1997, p. 122ff.
  5. ↑ Federal Environment Ministry (BMU); econsense (ed.); S. Schaltegger, C. Herzig, O. Kleiber, T. Klinke, J. Müller (authors): Sustainability management in companies. From the idea to practice: management approaches to implement corporate social responsibility and corporate sustainability. 3. Edition. BMU, econsense, Center for Sustainability Management, Berlin / Lüneburg 2007, p. 135. (CSM Lüneburg (1.6 MB; PDF))
  6. ^ S. Schaltegger, R. Burritt: Contemporary Environmental Accounting: Issues, Concept and Practice. Greenleaf, Sheffield 2000, ISBN 1-874719-35-7 .
  7. ↑ S. Schaltegger, T. Hahn, R. Burritt: Environmental Management Accounting - Overview and Main Approaches. In: E. Seifert, M. Kreeb (Ed.): Information, Organization and Environmental Management Accounting. Kluwer, Rotterdam 2001.
  8. ↑ T. Loew, K. Fichter, U. Müller, WF Schulz, M. Strobel: Approaches to environmental cost accounting in comparison. Comparative assessment of approaches to environmental cost accounting for their suitability for operational practice and their contribution to ecological corporate management. Federal Environment Agency, Berlin 2003, p. 150. (UBA Berlin (1.34 MB; PDF))
  9. ↑ lammsbraeu.de ( Memento of the original from May 19, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.lammsbraeu.de
  10. ↑ T. Loew, K. Fichter, U. Müller, WF Schulz, M. Strobel: Approaches to environmental cost accounting in comparison. Comparative assessment of approaches to environmental cost accounting for their suitability for operational practice and their contribution to ecological corporate management. Federal Environment Agency, Berlin 2003, p. 148. (UBA Berlin (1.34 MB; PDF))