May 28, 2008 by
Brian Butler | Filed under: Environmental Valuation and Accounting [1],Overview
Accounting and economic valuation may be separate although related issues. The tools and insights of economics can be used at an organizational level to enhance insights into what organizational options might be, but some of the tools need to be developed and explored in more detail. We would encourage the development of bridging tools that work on different levels of aggregation.
Integration of concepts and tools, such as valuation, accounting methods, performance metrics, LCA, eco-efficiency, eco-effectiveness, and the scorecard might benefit from integration of these concepts into a systemic filtering and bundling tool. This might come in the form of a technology complementary to or built into Enterprise Resource Planning (ERP) systems. (ERP provides the level of oversight and control necessary to ensure that all resources are all working towards the same goal.)
Sharing corporate level environmental cost and benefit information is very difficult and is complicated by issues of trust; loss of competitive advantage; and exposure to potential liability at many levels. Addressing this challenge will require industry level standards and possibly new regulations or new forms of industry collaboration to enable information across supply chains and overall environmental performance enhancement in an industry. The environmental manager might play a role in formulating industry and corporate response to these new standards.
Accounting methods can and should create a system of incentives supporting sound environmental management decisions. Environmental managers need to understand the methods of financial analysis that enable them to make the case for both investment and cost saving measures. Having this knowledge would enable them to better inform decisions related to the reduction of environmental externalities. Unfortunately, most participants did not feel like they were in a position in their organization to truly effect the final decision. Also, many felt the leadership of the organization ultimately determined the extent to which externalities were considered and fully incorporated into the management system and ethos of the company.
EHS managers are recognized as multidisciplinary resources within their firms, interacting with many functional areas within the company. The extent to which they interact with other functional areas varies greatly by firm. Some interacted with product development, marketing, finance, accounting, etc, but others were more limited.
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April 24, 2008 by
Brian Butler and
John Morelli | Filed under: Environmental Valuation and Accounting [1]
Our moderator for this topic has chosen to explore the following questions at the symposium workshop:
- What are some examples of how the more innovative corporations and countries are internalizing external environmental costs?
- How can environmental managers more effectively use these innovative techniques?
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April 29, 2008 by
AROMAKE AFIEGBE and
| Filed under: Environmental Valuation and Accounting [1],General,Literature Review
Gross National Product, while a tool for measurement of a countries well being does not always appropriately capture the full picture specifically to include inequality and poverty, true measure of human resource, environmental impact of various activities and the spiritual, social, political aspects of welfare. Many of these aspects cannot be measured in any quantitative sense, of course, which may tend to diminish their importance in the minds of policymakers. This literature looks at the efforts to define gross national product as a measure of development while appropriately taking into account and possibly integrating social and environmental concerns into the core accounts. Although not a requirement for countries, it is suggested that they prepare satellite accounts, comprising both physical and monetary units, consistent with the core accounts. “Green” accounting can offer policymakers insights into the long-term productive capacity of a nation through the investment and capital accounts.
Steer, Andrew, Lutz, Ernst. “Measuring environmentally sustainable development. ” Finance & Development 1 Dec. 1993: 20. ABI/INFORM Global. ProQuest. RIT Lib., Rochester, NY.. 29 Apr. 2008 <http://www.proquest.com/>
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April 20, 2008 by
Emily Ryan | Filed under: Environmental Valuation and Accounting [1]
Howard N Aspan. “Environmental value: A business view of environmental costs and opportunities. ” Environmental Quality Management 1 Jul 2002: 75-81. ABI/INFORM Global. ProQuest. RIT Lib., Rochester, NY.. 20 Apr. 2008
This article looks at environmental valuation from a strictly business perspective, placing the options into only three categories: cost, market, and income approaches. It views valuation as the necessary outgrowth of the corporate movement towards environmental regulation and the correct valuation of a business transaction, including any environmental impact. This is less about consumers and more about the business making a good deal. Some focus is given to the competitive advantage that can be gained through replacing ROI with return on environmental quality, but the calculations are viewed in terms on home re-sale and land value. At the heart of the valuation issue though is the need to be provided an independent assessment of underlying value - no matter the product, activity, or output.
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April 19, 2008 by
AROMAKE AFIEGBE | Filed under: Collaboratory,Environmental Valuation and Accounting [1],General,Literature Review,RESEARCH CATEGORY: TOOLS FOR SUSTAINABILITY
The term service provider solicits an immediate attention to the business community in defining an entity, individual or business, that provides for a need of another entity. To subscribe to the ecological environment as a “Service Provider” as implicitly captured in the term “Ecosystem services” challenges the social and economic community not only to begin to adopt the environment as a limited entity that provides existence to both business and humans, but to explore means to make this service provider stay in business, as it were, and be sustainable. The importance of this issue has prompted increased awareness programs and a growing development of ways to define the ecosystem providers or entities and explore ways to pay, in monetary term and otherwise, for its services. The aim is not only to design ways to give back to or preserve the environment but also to discourage further unnecessary depletion of the natural environmental resources by human practices through policy making and enforcement. The following article looks at ecosystem valuation in China with the aim of redirecting research attention in valuating ecosystems.
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April 10, 2008 by
Emily Ryan and
jsarkis | Filed under: Environmental Valuation and Accounting [1]
In Paul Hawken’s book, “The Ecology of Commerce”, he discusses ways to add unrecognized environmental costs to the free market. He mentions options for this such as producer responsibility and Pigovian taxes which, when working together, could enhance our valuation ability.
If the producer is forced to bear all of the costs associated with the product, then there are a couple of areas that need to be focused on. The internalized costs that currently are no included in product/service valuation are the spillover effect and the future generation cost.
For the spillover effect, that measures (or should measure) the impact of the production system on other systems, people, and places. The damage caused by any stage of manufacture should be included in the total spillover cost of an item.
For the cost to future generations, the calculation is even trickier. Examples include deforestation, global warming, and other resource depletion. This is where the Pigovian “sin tax” comes in – allowing producers to pay for their impact and hopefully increasing their desire to innovate away from their harmful activities.
Hawken makes the great point that the people and systems are already paying the costs in our health insurance, non-profit donations for clean-ups, etc.. By forcing the industries to pay we are truly representing the cost of our consumerism. “Integrating cost with price does not ‘raise’ the over-all expenditures of the consumers of the society, but rather places them where they belong, so that consumer and producer can respond intelligently.” (Hawken, p.83)
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March 25, 2008 by
Emily Ryan | Filed under: Environmental Valuation and Accounting [1]
Hello Environmental Valuation and Accounting group,
I am an IT manager and an MBA student with concentrations in technology management and environmental sustainability so I have never come across the concept of environmental valuation in my day to day work. Or at least I didn’t think so! After reading up on the topic I realized that every day I am facing decisions that use (or don’t use) environmental valuation in their pricing or cost/benefit analysis.
My personal career focus is to work with IT departments specifically to reduce their environmental impact and increase sustainability. Even though this is not the typical “environmental manager”, environmental valuation is critical to building a true ROI for IT systems and designing new “green” initiatives.
I am looking forward to working with you all to determine how we can successfully use the tools we currently have, and how we can even develop better ones – or more industry specific ones, for businesses who are not the basic manufacturers who must deal with compliance.
Thanks! – Emily
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January 15, 2008 by
John Morelli and
Brian Butler | Filed under: Environmental Valuation and Accounting [1],Overview
Welcome to the discussion! Researchers working on this important subtopic include: Jim Myers, Joseph Sarkis, Aromake Afiegbe, and Emily Ryan. Below are the various postings from the research team. Some will be abstracts of and links to relevant literature. Others will be original work posted here for comments, criticisms, suggestions, questions, etc. from professional environmental managers who visit this site. If you are interested in participating on this professional research team, or learning more about it, please contact us by clicking here.
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