Strengthening Corporate Commitment to Pollution Prevention in Illinois : Concepts & Case Studies of Total Cost Assessment

Submitter: Matthew Cordial

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https://hdl.handle.net/2142/2041 Copy

Description

Title

Strengthening Corporate Commitment to Pollution Prevention in Illinois : Concepts & Case Studies of Total Cost Assessment

Contributor(s)

• Illinois Department of Natural Resources
• Illinois Waste Management and Research Center (WMRC)

Issue Date

1997

Keyword(s)

• Accounting
• Source reduction (waste management) -- Illinois -- Case studies
• Pollution prevention -- Economic aspects
• Pollution prevention -- Illinois
• Economic development -- Environmental aspects -- Illinois -- Case studies
• Industrial management -- Environmental aspects -- Illinois -- Case studies
• Environmental auditing -- Illinois -- Case studies

Abstract

Since the late 1980s, both regulatory and market forces have been moving firms to rethink their pollution management practices. Despite these trends, however, the pace of conversion to a more preventive mode of environmental management has been slow, and many seemingly profitable pollution prevention (P2) opportunities remain unexploited. If many P2 investments in fact are in the best interests of a profit-driven firm, why does such underinvestment in prevention persist? The answer is arguably two-fold: (1) organizational characteristics of the firm; and (2) economic/financial barriers. This report focuses primarily on the latter explanation, Le., that P2 investments may be unable to compete with other potential uses of limited capital because they are disadvantaged by standard project financial evaluation techniques. Environmental accounting (EA) is a broad term that is used in three areas: national income accounting, financial accounting and management accounting. In managerial accounting, the focus of this study, EA comprises the identification, compilation, analysis, use, and reporting of environmental cost information, primarily for internal purposes, Le., for use within the company. It is in the last context that EA has enormous potential to help business strengthen its pollution prevention practices and, in turn, its long-term competitiveness. One EA method, Total Cost Assessment (TCA), is an approach to removing potentially unwarranted and misleading financial barriers to environmental investment. For this project eight fIrms in the Illinois printing and chemicals industries were selected for collaboration on Phase I case studies. These firms of widely varying size were chosen to represent a cross-section whose current capital budgeting and project evaluation practices capture the spectrum of those found in Illinois. The collaborating firms' views and practices were evaluated using the responses to written questionnaires on a variety of topics and the results of on-site interviews and follow-up conversations.

Publisher

• Illinois Waste Management and Research Center
• Illinois Dept. of Natural Resources

Series/Report Name or Number

TR Series (Illinois Waste Management and Research Center) ; 030

Type of Resource

text

Language

en

Permalink

http://hdl.handle.net/2142/2041

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