Eco-efficiency for sustainable manufacturing: an extended environmental costing method

Abstract

The opportunity of improving production sustainability through waste minimisation is getting more and more interesting because of remarkable waste generation and the contribution to increase the productivity of natural resources. The article is intended to propose an environmental costing method to enable a proper analysis of the flows of products, by-products and wastes produced by a whole production plant or simply by a section of this plant, in order to properly prioritise a list of likely interventions and to make better decisions to head for higher level of eco-efficiency, hence sustainability. The proposed method origins from a general activity-based environmental costing (ABEC) and, unlike traditional ABEC, considers as cost objects not only the expected products, but also by-products and wastes as in the material flow cost accounting (ISO 14051). Thanks to detail given by the proposed method, it is actually possible to go back to the sources of inefficiency of the process and to simulate the impact of likely eco-efficiency interventions in a what/if approach. Results from a case study of an Italian manufacturing company are finally provided and discussed

Impact of Sustainability Balanced Scorecard Types on Environmental Investment Decision-Making

“…Our findings lead us to conclude that eco-efficiency knowledge alone does not mediate the relationship between the BSC versus SBSC (H1a), the SBSC type (SBSC four-perspective versus five-perspective) (H1b) and investment decision-making that aims to achieve environmental objectives. This result is inconsistent with the findings of literature [39] that proved that increasing the knowledge of the efficient use of capital and environmental resources guides better decision-making, thereby asserting that it is essential that information should be managed properly to enhance eco-efficiency knowledge for better investment decision-making [13]. This conflicting result may be because knowledge of the efficient use of the process is not enough to interpret the data from the BSC and SBSC types unless it is combined with a knowledge of the SBSC architecture as well (e.g., [28]).…”

“…The link between the information received by managers and the decisions taken by them is influenced by the knowledge possessed by these managers [13]. Information without adequate knowledge to synthesize the information into actionable plans will not translate into efficient and effective decision-making [30].…”

Improving Eco-Efficiency through Waste Reduction beyond the Boundaries of a Firm: Evidence from a Multiplant Case in the Ceramic Industry

“…In such a context, increasing resource efficiency, that is, improving productivity and reducing production costs while simultaneously negative impacts on the environment [4,5], appears to be coming of age [6]. As material and energy costs represent at least 50% of the overall costs of manufacturing companies, European industries have anticipated potential savings of around $630 billion US per year through improved use of resources [7].…”

“…The concept of 'non-product output' or 'waste and by-product' enables a better understanding of the use of available resources. In addition to the actual costs of disposal, the 'non-product output' costs also include the resources value lost in waste and by-products generation, considering also the stage at which waste is produced [6,8,42]. As shown in Figure 1, ExtABEC considers resources, activities (split in 'support' and 'core' activities) and cost objectives (i.e., products, by-products and waste).…”

“…the objects, thus overcoming the traditional control system for waste management that is mainly based on physical unit information and not on monetary values. Resource flows to cost objects in ExtABEC (at company level) [6].…”