EcoMetrics: Integrating direct and indirect environmental costs and benefits into management information systems

Abstract

AbstractThis article suggests a set of metrics that may impact both profitability and environmental quality, capture and quantify eco‐efficiency costs and benefits, and help managers understand and focus on tangible, yet difficult‐to‐quantify benefits (such as improved morale, innovation, etc.). In order to do this, it will frame the issues pertinent to developing eco‐efficiency metrics; identify criteria for effective metrics to enable companies/consultants/etc. to discuss, evaluate, and select program metrics; outline the universe of possible metrics; suggest key metrics for a typical company; identify data quality, availability and other constraints; and suggest a methodology for incorporating environmental metrics into operating metrics.[Note: This article is not intended to provide a definitive overview of environmental metrics; rather, it proposes an operational framework for considering, selecting, and implementing metrics that are meaningful in both environmental and business terms. For an overview, see for example, Environmental Policy Performance Indicators;1 Company Environmental Reporting;2 The Greening of Industrial Ecosystems;3 Measuring Corporate Environmental Performance4].The flow and embodiment of materials and energy in production and consumption activities of the economy underlie both economic growth and environmental perturbations… [Yet] existing accounting systems can prevent modern firms from internalizing environmental costs and considerations, and can compound difficulties encountered in effecting environmentally preferable changes5.