Sustainability Management Accounting
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SUSTAINABILITY MANAGEMENT ACCOUNTING
WITH EXAMPLES CITED FROM
SAMSUNG ELECTRONICS CO. LTD
---Handouts & a copy of this presentation
can be downloaded free under:
http://de.slideshare.net/k_navita/sustainability-management-accounting
JohanaTchansi (534785)
Stiliyan Stoyanov (524094)
K. N. Phifer (523482)
22 January 2013
Management Accounting ClassInstructed byProfessor D. Arora
University of Applied Sciences (HTW) Berlin, Germany
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OUTLINE
1. Definition of Sustainability
Management
2. Samsung‘s Sustainability
Management System
3. Benchmarking
4. Cost-Benefit Analysis
5. Discussion
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WHAT IS SUSTAINABILITY MANAGEMENT ACCOUNTING?
Originated ca. 20 years ago
Subcategory of financial accounting focusing on non-
financial information about a firm’s performance
Disclosed to external parties
(capital holders, stakeholders, creditors other
authorities)
Covers three areas:
Economy, Environment, Society
(=Profit, Planet, People)
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SAMSUNG‘S SUSTAINABILITY MANAGEMENT SYSTEM
First company in Korea to be in Dow Jones Sustainability Index for 9 years in a row
SDI (Sustainability Development Initiative)
Nine areas their report(s) focus on:
- Creative Organizational Culture- Employee Health & Safety- Integrity Management- Increasing Social Contribution- Patents- Climate Change & Energy- Water Management- Mutual Growth & Supplier CSR
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BENCHMARKING Green Management Strategy
Samsungs´ efficient communication
securing patent competitiveness
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BENCHMARKING
Green management strategy has:
BASIC PHILOSOPH
YVISION SLOGAN
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BENCHMARKING Green Management Strategy
IDENTIFICATION OF KEY ENVIROMENTA L ISSUES
RISK ANALYSI
S
INTERNAL
CAPACITY
STRATEGY
DEVELOPMENT
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BENCHMARKING Samsungs efficient Communication
Listening to you
Customer satisfaction
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BENCHMARKING Securing patent competitiveness
Filled patent applications worldwide
Expanded the cross-licence patent cooperation
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BENCHMARKING
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COST-BENEFIT ANALYSIS
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ECONOMY: SUSTAINABLE GROWTH
Focusing on shared growth.
Initiation of support programs
for first- tier suppliers
Various support policies for
second and third- tier suppliers
Graded ‘’Excellent’’ by the
Korean shared growth committee
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Source: Samsung Sustainability Report 2011, http://www.samsung.com/us/aboutsamsung/ir/corporategovernance/corporatesocialresponsibility/download/2011Environmentalnsocialreport.pdf
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CREATING ECONOMIC VALUE FOR S. KOREA Samsung Electronics makes major
contribution to S. Korea’s economy.
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SOCIETY/ FINANCIAL CONTRIBUTION
*Increase in brand value
*Profiting from increased social wellfare
*Intangible benefits
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EMPLOYEE RELATED EXPENSES
* Low resignation rate: 5% in Korea and 15% overseas.
* Creating a work force of well trained and dependable professionals
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GREENHOUSE GASSES (GHG) MANAGEMENT
• Invested 1.01 trillion KRW (US $ 865 Million) in the implementation of ‘’Planet First’’ Initiative
• Pledged 6 trillion KRW (US $ 5.1 Billion) into the creation of a division focused on the development of solar panels
• Total of US $ 20.6 Billions to be invested into solar, energy efficiency, light emitting diodes and other green market
• Aiming at being number 1 in solar by 2015
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GHG REDUCTION ASSOCIATED WITH PRODUCTION PROCESS
• Reduction of GHG emissions associated with the production process in the period 2009 – 2013 – 50%
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GHG REDUCTION ASSOCIATED WITH PRODUCT USE
• The amount of GHG emissions caused by electricity consumption for use of sold products
• Decrease of emissions despite an increase in the number of sold products
• Achieved 17,630 tons of greenhouse gas emissions compared to 2008 baseline
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BENEFITS FROM GHG MANAGEMENT • Increase in brand value
• Undisputable benefits for the environment
• Product quality
• Exploring new markets
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DISCUSSION QUESTIONS Are the benefits of sustainability equal to the costs? - Prevention doesn‘t necessarily have a price. - Costs can‘t often be directly linked to actions, i.e
environmental pollution, adverse health affects
Are there any challenges in implementing sustainability management?
- Financial costs - Material issues (example: Coltan, a rare metal used in
producting electronics, found mainly in the Democratic Republic of Congo)
How can companies be truly motivated (incentives, penalties, etc.) to become more sustainable?
- Legislation w/ fines for violation or added import/export duties; international treaties
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THANKS FOR YOUR ATTENTION!Sources: Samsung Sustainability Report
www.samsungsdi.com/sustain/s4_3.jsp Tilt, C.A. (2007). "Corporate
Resposability Accounting and Accountants". Idowu, Samuel O.; Leal Filho, Walter (Eds.), Professionals' Perspectives of Corporate Social Responsibiliry, Springer-Verlag Berlin Heidelberg 2009.