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