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Über dieses Buch

This volume’s focus on the environmental accounting of supply chain processes is of particular relevance because these processes supply data about the environmental impact of relationships between business organisations, an area where the boundary separating internal and external accounting is ill-defined. Here, contributors advocate what they term ‘accounting for cooperation’ as a more environmentally positive complement to the paradigmatic practice of ‘accounting for competition’.



Introduction and Structure


Chapter 1. Sustainable Supply Chain Management and Environmental Management Accounting

Interests in and understanding of supply chain management are growing, along with a number of catalysts which include: reduction in trade barriers; development of logistics structures as a counterforce to globalisation; and reduced geographical spread in business. This raises a set of challenges for sustainable supply chain information management which is explored here, including: confidentiality and business records; cost-management and eco-efficiency; socio-cultural distance; complexity; and the need for rapid responses to the situation when a crisis occurs. These challenges lead to a critique of conventional cost management and the need to make sure credible information is provided in the supply chain relationship. A comprehensive Environmental Management Accounting (EMA) framework reveals that the links between sustainability management accounting and different decision settings are not clear in the supply chain relationship. The papers presented in this book provide a guide towards improved knowledge of EMA and supply chain accounting interrelationships, challenges and potential successes.
Roger L. Burritt, Stefan Schaltegger, Martin Bennett, Tuula Pohjola, Maria Csutora

Contemporary Issues


Chapter 2. Life Cycle and Supply Chain Information in Environmental Management Accounting: A Coffee Case Study

This case study illustrates the application of environmental management accounting in a medium-sized coffee refining and exporting enterprise in Southern Vietnam, with the example of the Neumann Gruppe Vietnam Ltd. It examines the relevance of environment-related supply chain information derived from life cycle assessments for environmental management accounting and reveals possibilities to improve eco-efficiency at the site level and for its supply chain.
All company-related information provided in this case study has been disclosed by Neumann Gruppe Vietnam Ltd. and cross-checked by the authors. The information is partly simplified to ensure both confidentiality and a better understanding of the case.
Tobias Viere, Jan von Enden, Stefan Schaltegger

Chapter 3. Motivations Behind Sustainable Purchasing

Sustainability issues in purchasing are receiving greater attention. Literature is rapidly growing, with several research programmes being initiated to investigate the topic. This study presents the results of a research project which aims to reveal and structure the motivating forces leading companies to make efforts in sustainability purchasing and the means used to attain achievements in some fields of sustainability. Results presented in the literature are scattered in terms of the fields of sustainability: most of the studies focus only on green or corporate social responsibility issues and there is a lack of exploratory models. Sustainability in purchasing is addressed in a comprehensive way including green, social responsibility and corporate growth issues. After presenting the results of a literature review, theoretical development was undertaken to create a framework in which it is possible to describe the means of sustainability applied and the motivating forces behind them. This framework serves as the basis for an empirical investigation among Hungarian companies. Empirical results confirm the usefulness of the theoretical framework: the number and the characteristics of sustainability activities were determined by the particular types of motivation – to avoid negative effects, to achieve compliance with expectations and to attain positive effects.
Gyöngyi Vörösmarty, Imre Dobos, Tünde Tátrai

Chapter 4. An Input–Output Technological Model of Life Cycle Costing: Computational Aspects and Implementation Issues in a Generalised Supply Chain Perspective

Material and cost flows play an important role within manufacturing systems in setting the structural interdependences among a supply chain of production processes. Environmentally-extended input–output analysis provides a computational structure that takes these interdependences into account. This is interesting for many applications within supply chain analysis and business processes analysis, especially as far as cost accounting is concerned. This chapter addresses the emerging issue of incorporating costs into life cycle assessment as a premise to outline a concept of life cycle costing based on an input–output technological model. This model is common to both physical accounting and cost accounting. It allows product costing and resource planning to be carried out while taking into account issues concerning inter-organisational cost management, multi-product systems, closed-loop recycling, pollution abatement processes, and the production and disposal of waste. Such a framework can also be employed in order to evaluate what effect different design solutions are likely to have on both the material flows, and even the associated whole-of-life costs.
Ettore Settanni, Giuseppe Tassielli, Bruno Notarnicola

Chapter 5. Farm Risk Management Applied to Sustainability of the Food Supply Chain: A Case Study of Sustainability Risks in Dairy Farming

This chapter applies corporate process and risk analysis to maintaining the sustainability of the food supply chain. Primary food producers are facing increasing demands and risks. Simple tools for managing the food supply chain and self-assessment techniques are needed to follow the requirements of the new Food Act in Finland and the European Union. The identification and evaluation of different types of risks on farms, such as financial, environmental or social risks, can give useful information for the management of the dairy and other food supply chains. Risk analysis is used to evaluate sustainability issues in the dairy farm milking process. The views of farm managers on sustainability risks in the milking process are compared against the demands of the dairy supply chain using force field analysis. This analysis highlights those factors and tasks that are critical to the economic, environmental and social sustainability of the dairy supply process. Process risk analysis tools can be seen as an example of a sustainability risk accounting system applied in small firm management.
Jarkko Leppälä, Esa Manninen, Tuula Pohjola

Social Issues


Chapter 6. Companies, Stakeholders and Corporate Sustainability – Empirical Insights from Hungary

Corporate sustainability is an increasingly popular concept in management research. Many projects aim to lead the business sector to see beyond its standard goals and voluntarily contribute to social and environmental goals as well. However, it is certainly not clear how corporate sustainability may contribute to the global goal of sustainability. In our paper, several reasons are presented as to why the contribution of the ‘mainstream’ paradigm of corporate sustainability to macro-level sustainability may be questioned. Convincing arguments can be made that these have to be radically changed in order to reach sustainability. Thus, corporate sustainability – just like sustainability – seems to have a strong social learning character. In such a situation public participation and deliberation have high importance in relation to corporate sustainability. These concepts of community decision-making may also be translated into the level of the organisation through the theory of stakeholder engagement.
After the theoretical analysis of a business’s role in sustainability, the potential conflicts between shareholder value goals and corporate sustainability, we discuss stakeholder engagement as a potential tool for corporate sustainability. We also introduce the results of empirical research in Hungary which aims to examine stakeholders’ environmental and social claims towards business. It is concluded that it is very unclear in Hungary whether present market circumstances and stakeholder pressures motivate, or even allow, businesses to move towards sustainability. Thus, before placing too much emphasis on stakeholder engagement’s role in organisational sustainability it is necessary to analyse its possibilities and shortcomings.
György Málovics, Izabella Szakálné Kanó, Szabolcs Imreh

Chapter 7. Corporate Social Responsibility and Competitiveness – Empirical Results and Future Challenges

Globalisation has boosted the demand for a more transparent accounting of corporate responsibilities encompassing social, economic and environmental dimensions. Proactive companies search for competitive advantage in markets by differentiating themselves from competitors. One way to do this is to engage in corporate social responsibility. This trend raises the issues of whether any connection between corporate social responsibility and competitiveness exists or even whether engagement in corporate social responsibility contributes to competitiveness. On the basis of an empirical study this article discusses the connections between corporate social responsibility and competitiveness of Finnish firms. The study by VTT and TKK Dipoli explored this connection from the following angles: first, how companies take into account corporate social responsibility requirements of stakeholders, second, how corporate social responsibility requirements guide business activities and decision making of companies and, third, whether and how socially responsible actions enhance firms’ competitiveness. The empirical study consists of case studies in companies identified to be leaders in corporate social responsibility and of a company survey with 150 respondents. As with several other studies, this study also provides support to the existence of a positive connection between corporate social responsibility and competitiveness. The chapter discusses the results of the study and identifies implications, recommendations and proposals for further research on corporate social responsibility and environmental management accounting.
Torsti Loikkanen, Kirsi Hyytinen

Chapter 8. Social Impact Measurement: Classification of Methods

This paper analyses and categorises thirty contemporary social impact measurement methods. These methods have been developed in response to the changing needs for management information resulting from increased interest of corporations in socially responsible activities. The social impact measurement methods were found to differ on the following dimensions: purpose, time frame, orientation, length of time frame, perspective and approach. The main commonalities and differences between the methods are analysed and the characteristics of the methods are defined. The classification system developed in this chapter allows managers to navigate their way through the landscape of social impact methods. Moreover, the classification clearly illustrates the need for social impact methods that truly measure impact, take an output orientation and concentrate on longer-term effects. This chapter also discusses the lack of consensus in defining social impact. The paper concludes with a brief discussion on theoretical and practical implications.
Karen Maas, Kellie Liket

Economic Issues


Chapter 9. New Decision Method for Environmental Capital Investment

The purpose of this chapter is to establish a decision-making method for evaluating capital investments in environmentally friendly projects. This method enables management decisions to be made appropriately under highly volatile conditions while promoting good corporate environmental behaviour. This chapter contributes to expand decision-making methods for environmental capital investment in environmental accounting. There are two challenges in establishing this method. The first is to convert environmental impact reduction into internal corporate value creation, which is done using the life-cycle impact assessment method based on endpoint modelling (LIME) tool described in the chapter. The second is to incorporate management decision flexibility in the appraisal of environmental investment, which is done using real options theory. The total economic value of the environmentally friendly projects then includes net present value, environmental impact reduction value and managerial flexibility value.
This chapter describes how this new environmental investment decision-making method was applied to a hybrid vehicle project in order to verify its effectiveness. The result indicates that the project which appears unattractive when evaluated using existing methods can be shown as attractive when this method is applied. It is considered that this method can contribute to the promotion of innovative environmentally friendly projects.
Norio Minato

Chapter 10. Carbon Accounting in Greek Companies Participating in the European Union’s Emissions Trading Scheme: Current Practice and Projected Financial Implications

Lack of a solid, uniform, efficient, and objective accounting background to record the economic impact of the tradable permits “grandfathered” to polluting companies misleads the users of corporate financial statements and hinders comparisons of performance. Further, it conceals the financial threat that an imminent need to purchase permits imposes on the profitability and competitiveness of companies participating in emissions trading schemes. The objectives were to investigate the way in which Greek companies record and treat transactions relating to carbon emissions allowances from an accounting perspective; and to predict the impact on corporate financial performance and economic prospects of future purchases of allowances. Data were collected by means of both primary research via questionnaires and telephone contacts and secondary research through the audited financial statements published by the sample corporations. Findings from research conducted in Greece in 2008 are presented and discussed. The working hypothesis was that in the following year, 2009, emissions trading scheme participants would have to purchase the currently free permits at the average stock exchange price established by market mechanisms. The role of variables, such as corporate size, sales, profitability, headcount, and asset base, was investigated to explain the choices and measure the significance of the impact. The results provide an insight to the perceptions of the companies, criteria of choice and economic prospects.
Benjamin Karatzoglou, Ourania Karatzoglou

Chapter 11. Environmental Management Accounting: Comparing and Linking Requirements at Micro and Macro Levels – A Practitioner’s View

The paper compares corporate disclosure reqirements to statistical agencies about material and energy consumption, environmental investments and expenditures, as specified by the Integrated System of Environmental-Economic Accounting (SEEA) for the macro level, with the guidance document on envi­ronmental management accounting, published by the International Federation of Accountants for the micro level. The paper discusses the definitions of materials and products, environmental costs and investments contained in both documents and highlights differences in the approaches taken towards environmental protection and integrated pollution prevention. The resulting recommendations for harmonisation have also been introduced into the curent SEEA revision process.
Christine Jasch

Other Issues


Chapter 12. The Benefit Side of Environmental Activities and the Connection with Company Value

Sustainability has become one of today’s most frequently used terms and is included in a growing number of documents. Before an environmental investment decision can be made, companies have to analyse not only the cost but related benefits. Benefits originating from environmental activities have higher importance. Environmental management accounting focuses much more on the cost side of the environmental activities than on benefits. Environmental benefits are often regarded as cost reduction only or some very limited opportunity for creating revenues. However, the profitability of environmental activities represents a very important opportunity for firms. As can be seen in this paper, the positive effect of an environ­mental activity involves more areas and is less tangible such as higher brand value, competitive advantages and lower operational costs. But how can these elements be measured and how much influence do they have on company value? This is the main question discussed.
Hajnalka Ván, Szilvia Gärtner

Chapter 13. Implementation of Water Framework Directive Obligations in Hungary: Estimating Benefits of Development Activities in Two Pilot Areas

Implementation of the Water Framework Directive entails several tasks for European Union member states including Hungary. One important issue is the estimation of economic benefits resulting from improvement of water quality and condition. Contingent valuation has been used in Hungary in two pilot areas: the natural river Túr and the artificial and less important Kállay Channel. Both areas can be found in the north-east of the country. Household willingness to pay for an improvement in the state of the water bodies is similar for both; most are ready to dedicate only a small proportion of their monthly income, equivalent to 0.5%. The relatively high proportion of zero offers can be mainly explained by the low level of income characteristic of the surveyed areas. The results of the survey can be used in a cost-benefit analysis to provide a basis for future programmes as well as coordinating international efforts for improving the water quality of catchment areas. In addition, companies also can make use of those results for their environmental performance evaluation processes.
Zsuzsanna Marjainé Szerényi, Ágnes Zsóka, Judit Rákosi

Chapter 14. Health, Safety and Environmental Costs and Chemical Selection in the Oilfield Industry: A Method for Informed Decisions During Project Planning

The oilfield industry uses vast amounts of chemicals to find and produce hydrocarbons. Chemical choices can significantly influence the health, safety and environmental consequences and risks of an oil well construction project. Each consequence and risk comes with a price tag. To select the most cost-effective chemical, the effect of chemical hazard on overall project economics must be included in assessments. Available methods can be laborious and seldom cover all health, safety and environmental consequences. Overall health, safety and environmental cost effects of chemical choice have not been translated into practical tools and thus the health, safety and environmental costs have rarely been calculated for oil well construction.
This chapter describes a new method and accompanying tool for assessing overall costs of chemical use. It combines predicted health, safety and environmental cost at risk with direct operational cost consequences of chemical hazard profiles. The method allows easy comparison of overall cost attributable to chemical choice. Comparing two high-density completion brines, a key consideration was to create a practical tool that allows environmental management accounting principles to be used as inputs into the project planning and purchasing stage. The approach developed represents a significant advance in making environmental management accounting principles easily accessible for everyday decision-making in the oilfield industry.
Ylva Gilbert, Anna Kumpulainen

Chapter 15. Sustainability Management Control

Sustainability issues create business opportunities and threats. Based on a discussion of drivers to create a business case for sustainability, this chapter argues for a more systematic approach to management than current approaches that in practice involve working with checklists. Given the core logic behind the sustainability balanced scorecard (SBSC) perspectives, a concept for sustainability management control is proposed.
Stefan Schaltegger

Chapter 16. Impact Assessment in the European Union: The Example of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)

The role of impact assessments in European Union decision-making has increased greatly over the past few years as a part of efforts to boost the Community’s economic performance through improvement of the regulatory environment. In the field of environmental legislation, however, such quantification and monetization efforts involve a number of theoretical and practical problems which could undermine the possibility of obtaining an unbiased outcome. This chapter examines the European Union’s environmental impact assessment practices using the example of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), the European Union’s new chemicals policy. As a highly significant piece of legislation the likely effects of REACH were subjected to thorough analysis by the European Commission as well as key stakeholders. It is shown that, while underpinning the expected positive overall outcome of the regulation, uncertainty involved in estimating the benefits results in limited applicability of the impact assessment’s findings in the decision-making process and contributes to the fact that REACH was finally adopted with substantially lower requirements than originally planned.
Anna Széchy


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