A number of leading U.S. companies are providing increasing proof of the link between improved environmental performance and financial gains: The GM Corporation reduced disposal costs by $12 million by establishing a reusable-container program with suppliers; Commonwealth Edison saved $25 million through more-effective resource management. Re-evaluating a company's supply chain -- from purchasing, planning, and managing the use of materials to shipping and distributing final products -- with an emphasis on environmental performance leads to savings. However, environmental performance is too often forgotten by supply-chain managers.
What are supply-chain managers missing? The fact is that conventional decision-making approaches often overlook or inadequately represent the financial gains that are produced by considering the environmental impact of materials. Many managers are unaware that improved environmental performance means lower waste-disposal and training costs, fewer environmental-permitting fees, and, often, reduced materials costs.
This guide, written by the U.S. EPA's Environmental Accounting Project, synthesizes the best practices of a several U.S. companies in order to outline a four-step process for environmental accounting. It offers a critique of traditional accounting methods and step-by-step guidelines to making informed, environmentally and financially responsible decisions. Managers will find innovative solutions in the areas of purchasing, materials handling, and storage.