Environmental Cost Management And Environmental Cost Management

The term of environment was used at the beginning of the 19th century which provides the meaning of natural surroundings with living souls and defined as a space inhabited and influenced by man (Rakos & Antohe, 2014). In this modern industry, environmental problems have increased enormously due to the negative side effects of the industrial expansion. Environment impact is a trendy topic nowadays because people are much more conscious to the way of organizations affect the world we live in. Furthermore, the environmental issues caused by industrialization are accepted because environment is a source of production factors to a company and may become polluted and exhausted over a period of time.

A question that crosses everyone mind is: Why should

The companies which set the pace on environmental issues will be seen as the leader of the corporate sector. In response to the possible ways of companies to think about their business sustainability and responsibility to the people around the world, a new form of accounting has been developed which known as environmental cost management. Environmental cost management is identified as a positive approach to reduce the detrimental impacts of company’s activities on the natural environment and at the same time contribute to competitive advantage in the

When harmful substances are released into the air, water or land, the resulting pollution used to be considered a cost (Murphy, 2010). In a real life case, the Deepwater Horizon oil spill and also known as Gulf of Mexico oil spill in year 2010 was the largest accidental marine oil spill in the history of petroleum industry. The estimated volume of leaked oil was approximated 4.9 million barrels and the oil flowed for about 87 days. The recovery cost from the oil leak into the ocean was definitely high due to clean up costs, compensations, testing cost for marine habitats, sea creatures and etc. Thus, environmental cost management aims to incorporate with both economic and environmental