Environmental cost management for green production (chapter 19)

In businesses and in markets, environmental and social impacts generate rises in costs of cleaner investments and the need to manage the ‘bureaucratic activities’ effectively and efficiently. There is a growing need to classify these new types of costs and their drivers. This interest is found not only in developed countries but also in many developing nations. Researchers have emphasized that environmental costs can potentially offer qualified information to improve efficiency and profitability analysis. They render the environmental consequences of manager decisions more ‘visible.’ The integration of production information with environmental costs can be viewed as a diffusion of managerial (and accounting) innovation. Innovative costing could enrich decision making processes through the important roles of coordination, attention directing and legitimizing. From the literature analysis of environmental management accounting (EMA), it emerges that the environmental information flow is currently underutilized. The results only evidence a limited awareness of the potential help that cost information and new practices of cost management might be able to offer in decision-making processes regarding strategic competitiveness and profitability. These managerial ideas, which are not completely accepted by practitioners and academics, address the study of EMA tools that can enhance management control systems. Managers feel the need to highlight a growing awareness by them of a positive relationship between environmental stance and company image. It is not easy to find the mapping of environmental drivers that can improve company competitiveness. A positive aspect is that the different approaches of studies with a wide utilization of methodological tools are trying to achieve valuable interdisciplinary debate on these issues.[...]