ENVIRONMENTAL COST MANAGEMENT
DEFINITION
Environmental
Environmental Impact
Element of an organization's activities that can interact with the environment
Change to the environment, whether adverse/beneficial, wholly/partially from an organization's activities
TYPES
Potentially Hidden
Contigent
Conventional
Image
Material, supplies, structure & capital costs - examine for decision
Regulatory - fees, licenses, reporting, training, remediation
Up front & back end - site prep, engineering, installation, closure & disposal
Voluntary - training, audits, monitoring & reporting
Penalties/fines, property liability, legal
Relationship with employees, customers, suppliers, regulators & shareholders
SYSTEM
Traditional Cost System
Modified Allocation System
Based on allocating overhead
CLASSIFICATION BY ACTIVITIES
Damage
Direct degradation
Indirect degradation (unnecessary usage)
Categories
Detection Cost
Prevention Cost
External Failure Cost
Designing process
Auditing environmental risks
Evaluate & select supplier
Internal Failure Cost
Testing for contamination
Inspecting products & processes
Auditing environmental activities
Maintaining equipment pollutiom
Recycling scrap
Operating pollution control equipment
Cleaning up polluted lake
Restoring land to natural state
Cleaning up oil spills