RIT Symposium Conclusions
May 28, 2008 by Brian Butler | Filed under: 1-Environmental Valuation and Accounting, 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.
