Environmental Cost Management - Potentials of material and energy flow based cost accounting systems

The environmental issue is of increasing importance to companies all over the world. To be able to take strategic advantage of this environmental issue, it is necessary to determine and to control the costs of corporate environmental protection. The adequate instrument to fulfil this task, is environmental cost management, based on an encompassing environmental cost accounting system. In literature, there are numerous environmental cost accounting approaches. One possibility, to calculate and control environmental costs, is a cost accounting system based on material and energy flows. Due to the encompassing determination of those costs, which relate to corporate environmental impacts, this approach is most likely to fulfil the requirements of an efficient environmental cost management. Different companies world-wide have successfully developed various forms of such material and energy flow based cost accounting systems. Thereby, these companies were able to reduce costs as well as to decrease their corporate environmental impacts. Thus, environmental cost accounting is an efficient instrument to achieve economic and environmental goals at the same time.