Accounting for SDFull cost accounting

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Accounting for SD/Full cost accounting

• FCA assumes that the current economics does not
  tell the truth
• Interested in externalities
• When the activities of one group of people have
  an impact on another group and when that impact
  is not fully accounted for by the first group

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More about externalities

• Not accounted for by originating organisation
  (financial costs/benefits accrue elsewhere or
  financial accounts never pick up the costs and
  benefits)
• Leads to wrong decisions
• So identify and internalise externalities
  (usually costs)

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The Sustainability Assessment Model (SAM)
Measuring Sustainable Development Performance
Tom Baxter
Jan Bebbington
David Cutteridge
Gordon Harvey
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How Does SAM Work?
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A Full Life Cycle Analysis


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The SAM Signature
ve
All figures are in monetary units
-ve
capitals
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The Elements of the SAM
Total turnover or total cost
Social benefit of product/service
Benefits via taxation
Social benefit of jobs
Resources consumed
Pollution impacts
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An Overall Measure the SAMi
SAMi 25
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Landfill Project Signature
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Tree Planting Scheme Signature
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Comparison Of Signatures
Landfill
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Conclusions

• SAM shows the most significant project impacts
  over its full life cycle
• The impacts can be shown as a signature and also
  combined into an overall measure of performance
  (SAMi)
• SAM is a simple, versatile, cost effective and
  usable tool which makes visible the key
  Sustainable Development issues
• This visibility improves decision making
  processes
• SAM can be used to aid design decisions

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Summary of lectures you need to know

• What accounting is about how environmental
  accounting differs
• Environmental auditing and practical experience
  of doing it
• Environmental/SD reporting look for self at
  reporting
• Accounting for SD full cost accounting an
  appreciation of the SAM