Advertisements
Archive | Sustainable accounting RSS for this section

The idea of a “living profit”

pexels-photo-226615.jpegI recently published a paper in Accounting History Review about a company called Bennett’s and their accounting in the early 1900s. This company provided malt, mainly to Guinness in Dublin. In the research for the article, it became apparent that producers of malt did not do very much management accounting. Bennett’s, for example, seemed not to cost their production process very often and seemed to accept the market price offered by breweries like Guinness.

One would thus think Guinness may have been in a strong position to dictate the price of malt, but this seemed not to be so. In an official corporate history of Guinness, a note is made of the fact that the malt providers should make a “living profit”. What this means is not defined, but when I read this I could only think of the contemporary idea of a “living wage”. This latter concept is to pay staff more than the minimum legal rates of pay (if there is one) and give them enough income to live – but not too much. I did a Google search for the term “living profit” and surprisingly – at least to me – there are no explanations or mentions. I cannot help but think that today the idea of a living profit could be applied in many supply chains, and indeed companies (and their shareholders) could ask themselves do they really need to make so much profit – think Apple, for example. I firmly believe history can teach us a lot, and this is one good example where some altered thinking might benefit society as a whole.

 

Advertisements

Going green in your house is expensive

  
In this post, I am having a bit of a go at the costs of material and devices that I would label as “eco” – things that are environmentally friendly and sustainable. I try too to give an answer.

Have you ever noticed how some Eco items cost more than, shall we call them traditional items? For example, eco building materials like some insulations are much more costly than the traditional materials. Or more efficient appliances such as heating boilers cost more. What bugs me a little is, if our goal to is to reduce energy consumption, reduce CO2 or live more sustainably, then why are many things that could helps us so costly?

Two reasons come to mind as a management accountant. First, there may have been some capital costs incurred by manufacturers to  produce newer and more sustainable products, which are included in the price. These costs may decrease over time as economies of scale creep in. A second reason is that although the costs may be higher, there may be savings to take into account. For example, an certain insulation maybe be twice the cost, but it can seriously reduce your heating bills over the several decades.

Plastic bag taxes – and the costs saved

It’s 13 years since Ireland introduced a plastic bag levy of 15c, then 22c. Since then, around €200m has been collected from consumers. England recently introduced a similar scheme and this prompted me to reflect on what the less use of plastic bags has meant for Ireland – with a cost/accounting angle of course.

The first thing that strikes me is the lack of plastic bags stuck in hedges. Not only does this mean a cleaner countryside, but much lower clean up costs for local councils.Second, I would say the packaging industry did not lose out, as paper bags are generally available in stores – cost neutral in terms of employment. This is good too as paper is renewable, but also lost people have a car boot full of reusable bags. I still have some dating back to 2002 believe it or not. Third, as a tax it worked in that it changed our behaviour as a nation – for the good of the exchequer and the environment.

  

Saving €13.3m annually on water….

1081507_proplus_waterbutt

Image from woodiesdiy.com

You may or may not know that Ireland has only recently started to charge for domestic water use. There has been some heated debate, but here are some simple numbers based my own household.

With two simple water butts – small 100l capacity costing about €60 In total (see the photo above) – I have saved at least 6,000 litres of water in the past year. At the metered rates this is not a lot saved financially, about €22. But if half of Irish households did this (about 600,000 houses) that is a total of €13.32 million per annum across the country. Not to mention how I have seen my kids get instilled with the idea of conserving water.

Of course that’s only half the story. Saving water from rainfall means less produced water, less stress on infrastructure, less energy consumed and so on. I have no idea what these effects would do to my savings figure above – certainly a multiplier.

Typical accountant you may be thinking, but that’s it, we need to think not only about costs we pay for water, but other costs too.

%d bloggers like this: