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opportunities for creating value from five-year period to 2026 due to the long term but increase costs in the
waste. But let’s first understand the environmental risks in their supply short term.
problem of waste and management chains, and these are likely to spiral The management accountant plays a
accounting’s role in finding solutions. upwards, according to CDP, a not-for-profit key role in this transition to circular
group that helps companies and models. There are many techniques and
Accounting systems do not capture governments disclose their environmental standards in management accounting’s
benefits of reuse impact. toolkit, including ISO 9000, which focuses
Those of us who have been around for a The problem is that most financial on quality management and continuous
long time will remember the culture shock systems and decision protocols are not improvement, and ISO 14000, which
of the total quality management and fully aligned with circular thinking. The focuses on environmental management.
just-in-time revolutions. However, the long-term benefits of reuse fall outside the
momentum of these transformations has visibility of short-term KPIs, whereas The case of EV batteries
dissipated at a time when resource use — short-term increases in costs are captured. At the Lloyds Banking Group Centre for
including its massive impact on our Financial reporting rules act against Responsible Business, we have been
climate — has become an urgent problem. capitalising on product design changes, researching ways of transitioning to EVs.
Customers, employees, suppliers, sustainable procurement contracts, or Generally, most routes to EVs are more
regulators, activists, and even investors are value from future-life asset sales. This sustainable than existing internal
all more savvy about the full costs of waste. means businesses are restricted in combustion vehicles, but some routes are
The tactic of outsourcing waste or disclosing related benefits or reduced more sustainable than others. One critical
environmental impact to your supply risks. component of any EV transition is the
chain or passing it on to your customers is Very few financial systems integrate the battery.
becoming socially unacceptable. The environmental, social, and governance The battery sits at the nexus of costs,
visibility of the negative consequences of (ESG) performance valued by responsible risks, social harm, environmental
business decisions has never been greater. investors or connect circular initiatives pollution, and performance, and it is a
And costs are predicted to grow that can drive this ESG performance. fast-evolving technology. Different
substantially. Reducing supply chain risks through batteries have very different sustainability
Major corporate buyers could face over circular thinking and decarbonisation will impacts, and these cost and benefit
$120 billion in increased costs in the save money and create many benefits in impacts are not always shared equally

FM-MAGAZINE.COM June 2022 I FM MAGAZINE I 21