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17 ENVIRONMENTAL COST
1MANAGEMENT
INTRODUCTION 1
LEARNING OBJECTIVES
LEARNING GOALS
2
LEARNING OBJECTIVES
1. Discuss the importance of measuring
environmental costs.
2. Explain how environmental costs are
assigned to products & processes.
3. Describe the life-cycle cost assessment
model.
4. Compare & contrast activity- & strategic-
based environmental control.
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Questions to Think About
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QUESTIONS TO THINK ABOUT:
Thamus, Inc.
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QUESTIONS TO THINK ABOUT:
Thamus, Inc.
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QUESTIONS TO THINK ABOUT:
Thamus, Inc.
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QUESTIONS TO THINK ABOUT:
Thamus, Inc.
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QUESTIONS TO THINK ABOUT:
Thamus, Inc.
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LEARNING OBJECTIVE
Discuss the
1 importance of
measuring
environmental costs.
9
LO 1
Why is it important to
measure environmental
costs?
10
LO 1
ECOEFFICIENCY: Definition
11
LO 1
SUSTAINABLE DEVELOPMENT:
Definition
12
LO 1
ECOEFFICIENCY
Many things
provide causes &
incentives that
foster ecoefficiency.
EXHIBIT 17-1 13
LO 1
ENVIRONMENTAL QUALITY
COST MODEL
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LO 1
ENVIRONMENTAL DETECTION
COSTS
Are costs to determine compliance with
appropriate environmental standards
including:
Regulatory government laws
Voluntary standards (ISO 14001)
Management’s environmental policies
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LO 1
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LO 1
17
LO 1
ENVIRONMENTAL COST
REPORT External
failure
costs are
the largest
costs.
EXHIBIT 17-3 18
LO 1
19
LO 1
ENVIRONMENTAL FINANCIAL
STATEMENT Investments in
environmental
benefits
partially offset
environmental
costs.
EXHIBIT 17-4 20
LEARNING OBJECTIVE
Explain how
2 environmental costs
are assigned to
products & processes.
21
LO 1
ASSIGNING ENVIRONMENTAL
COSTS
Product costs
Packaging
Products themselves
Process costs
Solid, liquid, gaseous residues
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LO 2
ENVIRONMENTAL COSTING:
Definition
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LO 2
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LEARNING OBJECTIVE
26
LO 3
LIFE-CYCLE ASSESSMENT:
Definition
Identifies environmental
consequences of a product
through its entire life cycle &
searches for improvements.
27
LO 3
EXHIBIT 17-6 28
LO 3
ASSESSMENT STAGES
3 formal stages
Inventory analysis
Types, quantities inputs needed
Environmental releases
Impact analysis
Effects of competing designs
Relative ranking of effects
Improvement analysis
Objective: to reduce environmental impacts
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LEARNING OBJECTIVE
30
LO 4
ENVIRONMENTAL
PERSPECTIVE
5 objectives for environmental perspective
Minimize use of raw or virgin materials
Minimize use of hazardous materials
Minimize energy requirements for production, use
of product
Minimize release of solid, liquid, gaseous residues
Maximize opportunities to recycle
31
LO 4
OBJECTIVES &
PERSPECTIVES Companies need
measures to
evaluate whether
objectives of the
environmental
perspective are
being met.
EXHIBIT 17-8 32
LO 4
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LO 4
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LO 4
EXHIBIT 17-10 35
LO 4
EXHIBIT 17-11 36
LO 4
EXHIBIT 17-12 37
CHAPTER 17
THE END
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