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Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Consortium for Advanced Management -
International
Measuring and Managing Environmental
Sustainability:
Using Activity-Based Costing/Management
(ABC/M)
Mark Lemon (Grant Thornton LLP)
Anthony Pember (Grant Thornton LLP)
September 22, 2015
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Introduction
• Consortium for Advanced Management
International (CAM-I)
• http://www.cam-i.org/
• Environmental Sustainability Interest
Group
• Formed to study the use of business
management tools and techniques for the
furtherance of environmental sustainability
initiatives
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Introduction
Environmental Sustainability
Operational Decision-Making
Strategy
Cost Management
Cost Management
Environmental Sustainability
Operational Decision-Making
Strategy
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
What is ABC/M?
“A methodology that measures the cost and
performance of activities, resources, and cost
objects. Resources are assigned to activities, then
activities are assigned to cost objects based on
their use. Activity-based costing recognizes the
causal relationships of cost drivers to activities.”
- CAM-I definition
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
What is ABC/M?
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
What is ABC/M?
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
How ABC/M addresses a
firm's GHG emissions
• Standalone model where resource inputs would
include the total spend on environmental costs
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
How ABC/M addresses a
firm's GHG emissions
• Environmental measure of importance to the
organization
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
How ABC/M addresses a
firm's GHG emissions
• True Power: Integrate multiple value items into a
model
• Combine cost, revenue, and GHG emissions as
value items
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
How to move towards a GHG
model using ABC/M
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
How ABC/M addresses a
firm's GHG emissions
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Is your organization ready to measure
and manage its GHG emissions?
• Support within the entire organization
• People in charge of the initiative have
proper authority to enact change
• How information will be used and who will
use it
• Ability to gather data
• Ability to collect data from the supply chain
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Benefits of using ABC/M to
measure GHG
• Identifying the GHG footprint of particular products and
services
• Providing a detailed understanding of the energy
consumption and emissions of particular activities within
a company
• Better defining the “boundaries” of emissions for which a
company is responsible
• Understanding how energy and GHG intensity affect cost
and how those costs are passed from producer to
consumer
• Building a valuable knowledge-base to help measure
and justify future corporate environmental and financial
decisions
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Benefits of using ABC/M to
measure GHG
• Enhancing ability to evaluate and compare GHG
intensity and cost implications of activities, products and
services
• Articulating GHG related costs, risks and opportunities to
shareholders and other stakeholders
• Engaging staff in targeted energy reduction steps
• Setting the example and expectation to suppliers and
contractors to do the same
• Enhancing public profile and reputation as a good
corporate citizen
Over Three
Decades of
Industry-led
Collaborative
Research
Global Leadership in Cost, Process and Performance Management
Questions?
