Pilot project on sustainability management accounting with the Styrian automobile cluster

The paper is based on a project with the Styrian automobile cluster in Austria and selected member companies. In six companies, the environmental management costs, as well as further costs for health and safety, risk management and other social issues were assessed. Less tangible items and external effects are addressed. Starting with the efforts to assess the financial effects of the sustainability performance indicators provided by the Global Reporting Initiative (GRI) for sustainability reporting, the UN DSD (United Nations Division for Sustainable Development) method for environmental management accounting (EMA) was enlarged by several other cost categories. This paper describes these and the experiences from the pilot projects. The two major cost drivers are the purchase costs of non-product output and the costs related to lost working days because of sick leave and accidents and the overtime pay to make up for these lost working days. The work of the Environmental Health and Safety (EHS) department helps to reduce these costs. The cost assessment scheme allows one to better understand the relationships between costs for treatment of undesired effects due to unimplemented protection measures and lost material purchase value in comparison to the prevention costs, which mainly consist of the internal management departments and related external consultants. The assessment of sustainability management costs is of interest for organisations, which already publish a sustainability report and want to more accurately assess the financial effects of such aspects addressed via EMA. It is also useful for small and medium sized companies, which use the assessment as a starting point to shape their (EHS) system. The main benefits are more accurate data and better arguments for investment appraisal or performance indicators as well as improved consistency of information and management systems that should help them to improve their environmental, social and economic performance.