Investing Green Environmentally Friendly Capital

Businesses who participate in environmentally friendly practices will become more profitable. There are difficulties and costs that a business will face and profit takes time but is proven to positively impact a business. “The reluctance to address the forces that are polluting the planet always comes down to money (Smith, “6 Reasons Nations Don't Go Green.”). Implementing environmentally friendly practices within a company “will win them customers, and increase profits” (McDonald, “Why Do (or Don’t) Companies Go Green?”). Many global companies today carry out environmental management tools to adapt to environmentally friendly practices, which helps gain customers, and in turn becomes more profitable. In this paper, I will go into further detail explaining why businesses should be more environmentally friendly, the benefits to be gained, costs that come with being environmentally friendly, and management ways that help a company become environmentally friendly.

Many firms are learning that being environmentally friendly and sustainable has numerous benefits. (O.C Ferrell, Fraedrich, Ferrell, 2015). This could enable them to increase goodwill from various stakeholders and also save money in the long term. This will mean that they are being more efficient and less wasteful of resources, which will enable them to be more competitive by satisfying stakeholders. The CEO of

Overhead costs are not in proportion to the production output because of the method they are using. This leads to inaccurate pricing and costing decisions. An Activity Based Costing System would help find the real relationship between the products produced and overhead.

Life cycle costing is a technique that is used to assess environmental impacts that are linked with the product life stages from manufacturing to consumption that is from raw material acquisition to processing or manufacture, distribution, consumption, maintenance and repair (Epstein & Buhovac, 2014). It shows and some of the environmental concerns associated with the product life (Koroluk, 2012).

There are several obstacles for manufacturers attempting to employ changes in their processes for more sustainable practices. One problem that manufacturers will run into is the lack of direction. Knowing that change is needed is the easy part of reaching sustainability. Knowing what changes to make is a much more complicated challenge. The idea of sustainability is discussed often, yet broad scope ideas are traded without specific details and applications. Team B Consultants Inc. (TBCI), is the

The infrastructure is not at present in place to permit efficient recycling of materials from old product to new. These materials include metal, polymers, refrigerant gas and glass. This situation is due largely to a culture of indifference from Governmental and regulatory agencies at present. The use of natural capital is unsustainable with the culture of supply of what the customer wants and not what they need, this is at present a cultural problem. This has a detrimental impact on the ecosystem.

The industry can be very susceptible to environmental issues together with other manufacturers. With the advent of campaigns toward saving the environment and “going green”, the society is now more concerned with how the industry’s wastes and other by-products are being managed. Using recycled materials and recycling one’s wastes can affect the industry’s over-all image as an environmental advocate.

To a regular person, the global concern about ‘going green’ might appear as a result of speculation from nervous politicians and alarmed citizens. But the reality is totally different. In recent years, businesses have gained much knowledge about the impact of their activities on environment and in turns their customers. Businesses are successively venturing to earn greater revenues. In this process, they are trying out every best possibility to entice their contributors- from customers to investors. Regardless to say, stakeholders these days are more socially responsible than ever. So to keep up to their expectations, businesses are also trying to expand or limit their activities to save the environment- from doing relentless research on lowering waste to lean management and even trying out various eco-friendly activities. Despite of all these, the ultimate question remains unanswered if it is financially beneficial to adapt those initiatives that is going to serve the

Finally, we can point out another main challenge for GREENoneTEC that is the rise of raw material costs which have extremely increased since 1995 (the price of copper had increased by more than 150 percent in 16 years for example). Thus our company has to deal with this increase by looking for opportunities to reduce the costs of production. It can play on economic scale, searching new suppliers less expensive or even changing the conception of its products with different raw materials.

Life Cycle Costing (LCC) is an important economic analysis used in the selection of alternatives that impact both pending and future

As we can see , environmental challenges in recent years have increased the trend of “going green” in businesses like never before. There are two main factors that are currently pushing toward environmental-friendly business practices, harsher international and local regulations, and the high fluctuations of fossil-fuel prices.

The company revenue can be spent to purchase sustainable plant and equipment. Installation of equipment means better atmospheric appeal for stores.

One positive implication capitalism has to the natural environment is industrial ecology, a system of chain production and consumption, serving to the lowest environmental impacts in a most environmentally sustainable economy as the main goal of operation (Richards & Pearson, 1998). The Companies in a like to operate in such way because of four major reasons. The most important factor is known as the corporate well-being, for it is determined by higher profits and growth provided by innovations in an industry. Profits are increased from recognizing the production ineffiency costs that comes from wasted inputs and energy losses; this allowing cost savings to increase and ineffiency to decrease. compliance with cleaner technology alternatives such as ones that produce less waste and less energy will provide long term savings which are both beneficial to the environment and the business at hand. A real world example freight company changes their salvaged driving equipment to hybrid vehicles. Money is temporarily lost, but the gasoline and maintenances cost savings will compensate in a long run period of time.

Activity-based management, activity-based costing and continuous improvement, all these help in the improvement of the efficiency in manufacturing, better control of overhead costs and the accurate costing of products. With this in mind, We disagree with the advice that Chuck Davis, the firm’s controller, gave Leonard Bryner. The traditional way of costing produce average costs that severely overstated or understated. Without the accurate costs, the firm would not be able to price properly their products and that would be damaging to the firm. With activity-based costing and management, all costs are accounted for with the help activity-drivers and overhead costs are decreased. In turn, the costs that the firm has for their products are more accurate and pricing is much easier.

Identifying the costs and benefits of a project is the first step; the next step is to identifying the value of these components. Monetary values such as income and lost income can be assessed with current values. However to place a value on environmental benefits and costs is more difficult. Harris et al (2006) describes four categories of values they are direct use value which can use market price valuation. Indirect use value is the category used to describe how the project can benefit the environment such as carbon sequestration. Option value takes into account the benefits lost due to irreversibility