Eco-efficiency for sustainable manufacturing: an extended environmental costing method

The opportunity of improving production sustainability through waste minimisation is getting more and more interesting because of remarkable waste generation and the contribution to increase the productivity of natural resources. The article is intended to propose an environmental costing method to enable a proper analysis of the flows of products, by-products and wastes produced by a whole production plant or simply by a section of this plant, in order to properly prioritise a list of likely interventions and to make better decisions to head for higher level of eco-efficiency, hence sustainability. The proposed method origins from a general activity-based environmental costing (ABEC) and, unlike traditional ABEC, considers as cost objects not only the expected products, but also by-products and wastes as in the material flow cost accounting (ISO 14051). Thanks to detail given by the proposed method, it is actually possible to go back to the sources of inefficiency of the process and to simulate the impact of likely eco-efficiency interventions in a what/if approach. Results from a case study of an Italian manufacturing company are finally provided and discussed.