Cost Accounting Research

Original citation:
Jasinski, Dominik, Meredith, James and Kirwan, Kerry. (2015) A comprehensive review
of full cost accounting methods and their applicability to the automotive industry. Journal
of Cleaner Production. http://dx.doi.org/10.1016/j.jclepro.2015.06.040
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Journal of Cleaner Production xxx (2015) 1e17
Contents lists available at ScienceDirect
Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro
Review
A comprehensive review of full cost accounting methods and their

applicability to the automotive industry
Dominik Jasinski a, *, James Meredith b, Kerry Kirwan a
a
Warwick Manufacturing Group, University of Warwick, Coventry, CV4 7AL, UK
b
Department of Mechanical Engineering, University of Sheffield, S1 3JD, UK
a r t i c l e i n f o a b s t r a c t
Article history: Full cost accounting has been applied in many industrial settings that include the oil and gas, energy,
Received 30 June 2014 chemical and waste management industries. Presently, it is not known how it can be applied in an
Received in revised form automotive industry context. Therefore, the objective of this paper is to review existing full cost ac-
12 May 2015
counting methods and identify an appropriate approach for the automotive sector. This literature review
Accepted 9 June 2015
Available online xxx
of 4381 papers extracted ten full cost accounting methods with a diverse level of development and
consistency in application. Based on a careful examination and critical analysis of each approach and
existing automotive sustainability measures, the Sustainability Assessment Model developed by British
Keywords:
Full cost accounting
Petroleum and Aberdeen University has been proposed as a well-developed and potentially practical tool
Sustainability for automotive applications. The Sustainability Assessment Model can be used by both academics and
Sustainability assessment model practitioners to translate a range of conflicting sustainability information into a monetary unit score. This
Automotive industry is an effective way of communicating trade-offs and outcomes for complex and multi-disciplinary sus-
Comprehensive review tainable decisions in the automotive sector. It measures a broad range of economic, environmental,
resource and social effects (internal and external), which is currently lacking in existing automotive
systems. Its other strengths are the ability to provide both monetary and physical metrics for sustain-
ability assessment, its flexibility and the ability to combine multiple sustainability dimensions.
Furthermore, this paper provides helpful clues for researchers interested in exploring full cost accounting
in the future by reviewing, analysing and synthesising the broad range of relevant sources from diverse
fields in this topic area.
© 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/by/4.0/).
1. Introduction convenience. The use of private cars has seen a large increase
compared to other transport modes such as buses, trains, metro
In the last half century, cars have become an important part of and bicycles (Geels et al., 2011). However, this expansion of car-
our lives and provide personal mobility with speed, comfort and based transport has brought a wide range of environmental and
social impacts, for example, the depletion of natural resources,
contribution to global warming, acidification of the atmosphere,
congestion, accidents and noise (Graedel and Allenby, 1998;
Abbreviations: CGS, Corporate Genuine Saving; CICA, Canadian Institute of
Chartered Accountants; CWRT, Center for Waste Reduction Technologies; EC, Eu-
Mildenberger and Khare, 2000; Mayyas et al., 2012). As a result of
ropean Commission; ELU, Environmental Load Unit; EMA, Environmental Man- these impacts, the automotive sector is under increasing pressure
agement Accounting; EP&LA, Environmental Profit and Loss Account; EPD, from policy-makers and other stakeholders to consider environ-
Environmental Product Declaration; EPS, Environmental Priority Strategies; Ex- mental and social values in their operations.
ternE, External Costs of Energy; FCA, Full Cost Accounting; FFF, Forum for the
Examples of strategies used by automotive organisations to
Future; GHG, Greenhouse Gases; IPA, Impact Pathway Analysis; ISO, International
Organization for Standardization; LCA, Life Cycle Assessment; LCC, Life Cycle mitigate social and environmental effects include investment in
Costing; MCA, Multi-Criteria Analysis; PPP, Polluter Pays Principle; PSI, Product clean technologies, design for sustainability and creating value for
Sustainability Index; SAM, Sustainability Assessment Model; SCC, Sustainability local and global communities (MacLean and Lave, 2003; Mayyas
Cost Calculation; SV, Sustainable Value; TBL, Triple Bottom Line; TCA, Total Cost et al., 2012). In order to manage these strategies economically,
Assessment; USEPA, United States Environmental Protection Agency.
* Corresponding author. Tel.: þ44 (0)24 7657 2528.
there is an increasing demand for robust decision-making tools that
E-mail address: [email protected] (D. Jasinski). measure and inform managers about the economic, environmental
http://dx.doi.org/10.1016/j.jclepro.2015.06.040
0959-6526/© 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
Please cite this article in press as: Jasinski, D., et al., A comprehensive review of full cost accounting methods and their applicability to the
automotive industry, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2015.06.040
2 D. Jasinski et al. / Journal of Cleaner Production xxx (2015) 1e17
and social consequences of their decisions (Steen, 1999; Fiksel, soil pollution such as greenhouse gases (GHG), sulphur dioxide,
2009; Mayyas et al., 2013). This paper proposes the Full Cost Ac- volatile organic compounds (VOCs) and toxic substances.
counting (FCA) concept as a practical tool to deal with the The following terms are used as synonyms of FCA in the litera-
complexity of triple bottom line decisions in the automotive envi- ture but they embody the same concept: full environmental cost
ronment. It embraces both internal and external sustainability accounting (Epstein, 1996), total cost accounting and total cost
impacts and translates them into the widely known and accepted assessment (Centre for Waste Reduction Technologies (CWRT),
business language of ‘money’ (Bebbington et al., 2007). 1999). The term FCA is also used interchangeably with full cost
FCA is not a new concept; it has been applied in many different pricing but it is important not to confuse the nature and purpose of
settings such as the energy industry (USEPA, 1996), oil and gas these two tools. FCA provides useful input information for the de-
industry (Baxter et al., 2003), chemical industry (Taplin et al., 2006) cisions on pricing an entity's products and services by identifying,
and urban development (Xing et al., 2007). However, it is not measuring and monetising the costs that may be considered when
known if it is applicable in an automotive context. This paper aims moving towards the full cost pricing structure. These costs can then
to answer two research questions: (1) What FCA methods have be incorporated into the prices of goods and services through full
been developed to date? and (2) What FCA method is appropriate cost pricing (CICA, 1997).
for the automotive setting? A comprehensive review with a sys-
tematic approach has been conducted to identify all the FCA 2.2. Cost allocation and boundaries issues
methods which have been developed to date. Critical analysis of the
methods identified selects the one that fits the specifications and FCA was developed to adjust the existing prices of products and
needs of an automotive business. services by monetising and incorporating both internal and
This article begins with a background section that explains the external impacts (positive and negative), including environmental
concept of FCA and related issues. A brief description of the and social externalities (Bebbington et al., 2001). For example, a
decision-making issues in automotive organisations and how FCA typical petrol car releases pollutants that contribute to acid rain and
can assist in supporting these decisions are then discussed. The climate change as well as contributing to negative health effects
next section describes the research methods used for the review of resulting from reduced air quality. These externalities are real costs
FCA studies. The results of the review are synthesised and reported to society but they are not reflected in the price of petrol (Bent and
in the following section. Finally, the discussion section interprets Richardson, 2003). Hence, in the existing system, the cost of
the results and discusses the implications of the review for the external impacts is borne by society and neither companies nor
automotive industry. customers pay the full cost of production and consumption (Howes,
2002). If the market prices of products and services were to reflect
the full cost (including social and environmental externalities),
2. Background information and major issues
there is a possibility that consumers would switch their con-
sumption to less environmentally and socially damaging products
This section introduces the reader to the concept of FCA, spec-
and services (Russell, 2011). Only when companies get their prices
ifies the related terminology and identifies major methodological
right and start paying for the external costs of their operations can
issues that should be considered when applying FCA. It will be
profit be considered as environmentally and socially sustainable
taken as the basis to determine relevant key words for searching
(Howes, 2000; Russell, 2011).
the literature and creates a theoretical framework which will be
For this system to function effectively, the problems of bound-
used for assessing studies included in the review.
aries and allocating a specific impact to the particular activity or
organisation would have to be resolved. When applying FCA, or-
2.1. The concept of FCA ganisations need to make decisions on which impacts to exclude
from the assessment and account for. According to the polluter pays
FCA, like life-cycle costing, cost-benefit analysis, balanced principle (PPP), an organisation should be accountable only for
scorecard for sustainability and material flow cost accounting, is direct impacts which it has the ability to control (Howes, 2000). If
classified under the umbrella of Environmental Management Ac- this principle were to be applied equally and consistently, all pro-
counting (EMA) tools and systems (Jasch and Savage, 2009; Qian ducers in the supply chain (including customers) would be
and Burritt, 2009). The purpose of EMA is to assist the internal responsible for the direct environmental and social impacts
planning and decision-making process within an organisation by resulting from their own production processes and consumption
measuring environmental information and making it more visible decisions (Howes, 2002). To avoid the danger of double counting,
for decision-makers (Schaltegger and Burritt, 2000). EMA iden- all producers and customers would have to calculate their own
tifies, collects and analyses both physical information (e.g. use and sustainability cost by using the same narrowly defined system
flows of materials, energy, water and waste) and monetary infor- boundaries (Howes, 2000).
mation on environment-related earnings, costs and savings (Burritt The PPP is difficult to apply in practice as it requires the
et al., 2002; Jasch and Savage, 2009). The majority of EMA tools concerted action of everyone along the supply chain (Russell, 2011).
place particular emphasis on measuring direct environmental costs Furthermore, the problem of allocating a specific impact to a
such as the use of energy, materials and water, and waste genera- particular activity or organisation would have to be resolved. To
tion as they are directly related to a number of environmental illustrate the issue, Bebbington et al. (2001) provided an example of
impacts caused by organisational operations (Jasch, 2003). What sulphur dioxides that, once released into the atmosphere, form acid
distinguishes FCA from other EMA tools is that it has been devel- rain, which then acidifies water reservoirs and subsequently
oped to measure both an entity's direct costs and indirect costs damages fish stocks. A water reservoir can be chemically restored to
(Canadian Institute of Chartered Accountants (CICA), 1997). It also its original state and restocked with fish; however, it is difficult to
captures external costs, which are defined as the damages or estimate the link between the company's emission of sulphur di-
negative effects of an entity's activities and decisions borne else- oxide, reservoir acidification and the cost of restoring the envi-
where in the system by parties not responsible for causing these ronment. Hence, it becomes a challenge to scientifically allocate
effects in the first place (Bebbington et al., 2001; Russell, 2011). The responsibility or benefits unless they are related to consequences
most obvious external costs are the various forms of air, water and (Steen, 1999). At the organisation level, appropriate decisions need
D. Jasinski et al. / Journal of Cleaner Production xxx (2015) 1e17 3
to be made as to which economic, environmental and social flows from diverse research fields is required to better understand the
should be allocated to the specific product system or systems (Luo physical impacts of flows and their costs.
et al., 2009). Industrial processes are usually multifunctional and The cost of control approach provides monetised values for the
their output comprises more than one product (Guine e et al., cost of installing and operating pollution control mechanisms that
2002); hence, several products or product systems share the will control (reduce, eliminate, avoid) the pollution to a prescribed
same resource flows and emissions (Steen, 1999). level (CICA, 1997). According to Howes (2002), this approach is less
An alternative approach is to incorporate wider life cycle im- controversial than the damage function and provides more reliable
pacts and extend the boundaries both upstream and downstream estimates because it uses ‘real’ market prices for existing techno-
in addition to including the entity's own effects (Bebbington et al., logical solutions to avoid, restore or control pollution. It is consis-
2001). According to Bebbington (2007), an assessment of an activity tent with the United Nations recommendations for environmental
which is blind to upstream and downstream effects cannot fully adjustments to the national accounts (Howes, 2002). However,
address sustainability. A sustainable organisation cannot operate in these methods are useful only if technologies exist for the restoring
an unsustainable economy (Howes, 2002) and therefore organisa- or avoidance of an impact (Bebbington et al., 2001). Antheaume
tions should at least consider incorporating life cycle impacts. Bent (2004) concluded that avoidance cost for a number of pollutants
and Richardson (2003) concluded that as long as sustainability is difficult to calculate due to the limited availability of solutions on
accounting is a voluntary exercise, the issue of selecting between the market to avoid the release of these pollutants. Furthermore,
narrow and wide system boundaries ultimately rests in the deci- cost of control methods produce a surrogate figure since they do
sion of the individual organisation. not estimate the real damage of the entity's activities. Hence, the
method does not define the link between the specific emission and
the damage caused (Antheaume, 2007).
2.3. Monetising environmental and social impacts The limitation of all the methods presented is that they are not
accurate and provide only a crude estimate of the potential envi-
A number of valuation techniques exist that can be used to turn ronmental and social costs (Antheaume, 2004; Bebbington, 2007).
social and environmental effects into monetary values (see e.g. Usually, a range of numbers is calculated for a given impact. For
Milne, 1991; Bebbington et al., 2001; Howes, 2002). They can be example, Tol (2009) calculated based on 232 published estimates
grouped into two main categories: doseeresponse techniques and that the social cost of carbon should range from $25 to $50 per
behavioural methods (Milne, 1991). metric ton of carbon. Clearly, different conclusions can be drawn
Behavioural methods (such as contingent valuation, hedonic from an FCA exercise depending on which estimates and evaluation
pricing and travel costs) measure the money value of a specific techniques are selected (Bebbington et al., 2001). Furthermore,
impact directly from the preferences or behaviour of the affected monetisation of environmental and social flows is subjective in
stakeholder (Bebbington et al., 2001; Bent and Richardson, 2003). nature and many impacts such as human and ecological health
Information can be obtained directly from surrogate market data or have not been determined scientifically which brings into question
indirectly from an individual using questionnaires, surveys or the reliability of such an exercise (Schmidt and Sullivan, 2002). An
experimental techniques (Milne, 1991). These methods have wide independent audit is required in order to provide assurance as to
applications and can be relatively straightforward and uncontro- the reliability, fairness and completeness of FCA estimates (CICA,
versial if they are based on actual behaviours and market prices (i.e. 1997). However, as long as no generally accepted standards for
hedonic pricing relies on variations in housing prices as an indi- producing such information exist, the possibility of auditing FCA
cation of the value of local environmental attributes) (Bebbington results is limited. Also, the ability of a single monetary technique to
et al., 2001). However, behavioural methods may also be subject value all possible social and environmental externalities is another
to a number of inherent biases. For instance, the contingent valu- problem. Primary monetary methods (such as doseeresponse
ation method relies on the stated preferences of individuals ob- methods) provide estimates for a limited number of flows and
tained by questioning people about the amount they would be impacts (Antheaume, 2007). Despite the lack of widely accepted
willing to pay for specific environmental or social services or the standards, Bickel and Friedrich (2004) recommended the damage
amount of compensation that they would accept to give up these cost method as the primary technique for valuing externalities. If
services. Contingent valuation is thus based on what people would damage cost estimates involve too many uncertainties then cost of
hypothetically do, as opposed to being based on observation of control methods should be used. Behavioural methods should only
their actual behaviours, raising the issue of its validity (Milne, 1991; be considered if doseeresponse methods cannot be applied or as a
Bent and Richardson, 2003). supplement for doseeresponse methods to assign monetary value
Dose-response techniques, unlike some behavioural methods, to all important externalities of an object.
are considered as indirect valuation techniques because they do not
rely directly on individuals' preferences (CICA, 1997). They are 2.4. FCA and sustainability
divided into the damage function approach (damage costs) and the
cost of control approach (avoidance, restoration, abatement and The Triple Bottom Line (TBL) theory describes sustainability in
maintenance costs), which are considered as two alternative three dimensions: economic, environmental and social (Elkington,
methods (Milne, 1991). The damage function estimates damage in 1999). These dimensions strongly influence each other and should
monetary terms caused by a specific pollutant from a specific site be integrated and balanced to pursue sustainable development.
through scientific, statistical and behavioural valuation methods Hence, if FCA is to be a powerful tool (or at least a means as sug-
(CICA, 1997). However, the fact that it is based on scientific evidence gested in the European Commission's (EC) Fifth Action Programme)
is also considered its weakness because it is limited in terms of data which can lead towards a more sustainable economy (Bebbington
availability (USEPA, 1996; Cavanagh et al., 2007). It is also complex et al., 2001), then it becomes critical that FCA should address
and time-consuming to apply in practice and it is based on a financial, environmental and social issues. However, up until the
number of judgements and assumptions (CICA, 1997). Damage cost late 1990s, the environmental and economic aspects of sustain-
for major pollutants can be found in scientific studies (see e.g. ability were dominant in FCA studies (see e.g. Huizing and Dekker,
Bickel and Friedrich, 2004; Tol, 2009), but more estimates for the 1992; Rubenstein, 1994; USEPA, 1996). The social dimension was
effects are required. Antheaume (2004) recommended that input ignored and the first calls for incorporating the social sphere into
FCA studies were recognised by The International Federation of improving conventional internal combustion engines, developing
Accountants (1998) in their definition of FCA. Bebbington et al. clean and new technologies, improving recyclability and improving
(2001) also emphasised that it is intellectually and morally inde- safety (Mildenberger and Khare, 2000; MacLean and Lave, 2003;
fensible to be entirely blind to social externalities. Therefore, they Mayyas et al., 2012). Each strategic approach intended to improve
recommended that social FCA is a subject area where future work is the environmental and social performance of a car is driven by a
much needed if FCA is to be a tool that recognises and captures all series of techno-economic issues and decisions (Mayyas et al.,
sustainability issues. 2012). Design engineers and managers in the automotive busi-
This section has provided a definition of FCA and distinguished ness sometimes need to consider a large number of conflicting
this term from other related EMA concepts. Important methodo- environmental, social and economic factors (Mayyas et al., 2013),
logical issues have been discussed, such as cost allocation, system although winewin scenarios are possible. For example, it is esti-
boundaries, monetisation of social and environmental impacts and mated that a 10% reduction in a vehicle's weight translates into an
links with the TBL theory which will be used as the theoretical increase in miles per gallon of 5% (Mayyas et al., 2011). However, in
framework to assess FCA methods in the following sections. some cases, improvements in one area require trade-offs in other
areas. The selection of materials for a reduced car body weight may
3. Motivation for applying FCA in the automotive industry have financial implications for the company, mainly in the form of
increased expenses by changing the design, manufacturing and
This section provides a brief overview of the decision-making recycling processes (Mayyas et al., 2012). Managers and design
issues in automotive organisations. It explains how FCA can assist engineers in the automotive business need to estimate the
in supporting these decisions and what benefits it can bring to the magnitude of these trade-offs before they can make a decision.
business. Hence, in order to make the best possible choices, they need
effective and credible measurement tools to understand all of the
3.1. Decision-making in automotive organisations economic, social and environmental impacts of their decisions as
early in the product design cycle as possible (Fiksel, 2009). Vehicle
Automobiles have extensive ecological and social impacts (e.g. design and development is considered to be the most important
energy consumption, contribution to global warming, waste, noise stage of the automobile life cycle because it determines the lifetime
and accidents) at every stage of their life cycle. These impacts begin costs and overall sustainability performance such as fuel con-
with the extraction of minerals to produce raw materials and sumption, materials composition, safety and emissions (MacLean
components, moving to car manufacturing and assembly, usage and Lave, 2003). The decisions made at this point have economic,
and eventually end-of-life disposal (Graedel and Allenby, 1998; environmental and social implications throughout the entire life-
Mildenberger and Khare, 2000; Mayyas et al., 2012). Due to the time of the vehicle.
high ecological and social footprint of the automotive sector, car
manufacturers are under pressure from policymakers and other 3.2. Applying FCA in the automotive business
stakeholders to improve the sustainability performance of vehicles
at every stage of the life cycle (see Fig. 1). Design engineers and managers in the automotive business
Automotive organisations use similar approaches and strategies need to formulate some kind of mathematical function to assess all
to meet the requirements of sustainability legislation. Examples of conflicting objectives before making decisions (Mayyas et al., 2013).
these strategies include reducing weight, improving aerodynamics, It becomes extremely difficult when conflicting factors are
Fig. 1. Examples of sustainability requirements imposed on British car manufacturers at different stages of a car's life cycle.
measured and presented in different units. For example, a widely processing costs, selling recyclable goods and utilising other
accepted tool to assess the environmental performance of a vehicle environmentally-friendly technologies (Zokaei et al., 2013). As with
from the cradle to the grave is Life Cycle Assessment (LCA) (Khan carbon dioxide, externalities can be internalised at a certain point
et al., 2004). LCA techniques provide physical information about in time, therefore they are considered as future costs (CICA, 1997).
the internal and external environmental impacts of automobiles Knowing and anticipating them before they arise can assist in a
such as tonnes of carbon dioxide, sulphur dioxide, nitrogen oxides, company's strategic planning and risk management (Howes, 2000).
cubic metres of water or megawatts of energy (Guine e et al., 2002). Although there is potential for applying FCA in the automotive
When compared against each other, it becomes difficult to decide business, it is still unknown which FCA approach is potentially
which performance indicators are more or less relevant (Bickel and practical for automotive applications. Past experiments with FCA
Friedrich, 2004). For example, an annual emission from an average have provided different methods in this field. The following sec-
passenger car is approximately 10.5 kg of VOCs, 112 kg of carbon tions explore these methods by systematically reviewing the
monoxide, 8.3 kg of nitrogen oxides and 4416 kg of carbon dioxide available FCA literature.
(USEPA, 2008). Although the emission of carbon dioxide appears to
be the most significant if considering the volume, the direct com- 4. Research methods
parison of all these impacts is complex because 1 kg of carbon di-
oxide causes different social and environmental impact severity Review papers on FCA exist in the wider literature (see
than 1 kg of nitrogen oxides (Friedrich and Bickel, 2001). Bebbington et al., 2001; Antheaume, 2007) but a systematic review
An optional function in LCA is a weighting step where numerical has not been undertaken. This is needed to identify all of the
factors are assigned to each assessed impact category according to methods that have been developed to date and make recommen-
their relative importance (Bickel and Friedrich, 2004). The dations. The advantages of this approach over the conventional
weighting stage is based on value choices and since there is no review are objectivity, transparency, minimised risk of bias in the
recommended method, it can take the form of money value, stan- results and its methodological and standardised approach (Denyer
dards or expert panel (Guine e et al., 2002). FCA can be used in and Tranfield, 2009; Booth et al., 2011; Jesson et al., 2011). The
automotive organisations as a weighting algorithm by translating a method used to survey the literature and select papers is repro-
range of conflicting information into a single, monetary unit score ducible and explicit, which allows researchers to obtain similar
(Steen, 1999). The advantage of this approach is that monetary units results when the procedure is repeated (Denyer and Tranfield,
are conceivable and the importance of an impact can be directly 2009; Pickering and Byrne, 2013). Examples of these methods in
and intuitively grasped (Bickel and Friedrich, 2004). Bringing all the application can be found in Ceulemans et al., in press, Klewitz and
sustainability information into monetary values facilitates the Hansen (2014) and Stechemesser and Guenther (2012).
decision-making process by providing a more transparent picture The review process in this paper followed the review protocol
about the sustainability performance of a product, process or the (Table 1) that contains information about the review question, in-
whole organisation (Bent, 2006; Taplin et al., 2006; PUMA, 2010). It clusion criteria, search strategy, data extraction, quality assessment
is an effective way of communicating trade-offs and outcomes for and data synthesis (Petticrew and Roberts, 2008; Booth et al., 2011).
complex and multi-disciplinary sustainable decisions. Diversity and heterogeneity of the FCA literature required a com-
FCA not only allows us to identify trade-offs between alternative bination of different techniques at different stages of the review
objectives, but also to communicate this information in an effective process.
way to other parts of the business (Steen, 1999). In large organi-
sations such as automotive, different management levels and 4.1. Review question and inclusion criteria
business functions require different sustainability information
(Lynch and Cross, 1995; Burritt et al., 2002). For example, boards of A review question represents the scope of the literature review
directors, top management and accounting and finance de- and its characteristics provide inclusion criteria for identified pa-
partments primarily understand the language of money, therefore pers by considering the four PICO elements: population (a specific
they require monetary data to make strategic decisions. Middle group), intervention, comparison (optional for two or more in-
management must be bilingual as they need to convert physical terventions) and outcome (Petticrew and Roberts, 2008; Booth
information generated by LCA to monetary terms for top manage- et al., 2011). The review question and inclusion criteria for the
ment and vice versa to supply lower management and engineers systematic review of FCA studies are presented in the review pro-
with physical information so that they can understand the impli- tocol (see Table 1).
cations of strategic decisions made by senior management. Thus, The primary publications included in the review process were
FCA supports strategic choices and improves communication be- full papers in peer-reviewed journals. However, a great quantity of
tween different management levels and departments by turning FCA evidence exists in resources other than scientific journals (e.g.
sustainability into the most understandable and widely accepted government publications, research, business or industrial reports);
business language of ‘money’ (Bebbington et al., 2007). therefore, a wide range of published and unpublished studies
There is also a business case for applying FCA in any type of (including grey literature) have been accepted in the review pro-
business, including automotive. A measurement system based on cess with the exclusion of presentations, book reviews and com-
FCA can expose new business or investment opportunities by ments. The review includes only studies reported in English
measuring internal and external sustainability costs and benefits. because the majority of FCA studies have been conducted in native
This is of particular importance for car manufacturing which is English-speaking countries such as the United Kingdom (UK), New
resource and energy-intensive, representing a significant cost Zealand, the United States of America (USA) and Australia, which
element of a car and exposing a company to additional costs such as minimises the risk of language bias in the results.
‘green’ taxes, penalties and fines. Measuring internal impacts may
provide immediate financial gains in the form of lower costs from 4.2. Searching the literature
reduced waste sent to landfill, water and energy consumption or
carbon emissions. For example, Toyota saved approximately 38 Existing techniques for scoping and searching the literature
billion yen (equivalent to half a billion US dollars) between 2008 include database and grey literature searching, reference list
and 2010 mainly by reducing energy consumption, reducing waste checking, citation searching, hand searching and contacting experts
Table 1
Review protocol designed for the literature review process.
Step Research question/Methods
Review question What FCA methods have been developed to date?

Inclusion criteria Population: Studies representing the FCA concept
Intervention: No intervention in the research question
Comparison: No comparison in the research question
Outcome: Studies that represent, constitute or strengthen any FCA method
Exclusion criteria Presentations, book reviews, comments and all studies reported in non-English language
Searching the Methods: database searching, grey literature searching, reference list checking, citation searching and consultation with an expert
literature Databases searched: Google Scholar, ScienceDirect, Emerald Insight, Wiley Online, Web of Science
Keywords for database searching: ‘full cost accounting’, ‘total cost accounting’, ‘full environmental cost accounting’, ‘total cost assessment’ and a
combination of the following terms: ‘accounting’, ‘valuing’, ‘externalities’, ‘external cost’, ‘social accounts’ and ‘environmental accounts’
Quality assessment Methods: hierarchy of study design (experimental, observational, expert opinion) and quality checklist (lists of questions appropriate to the research
question)
Data extraction Data extraction form with developed categories from relevant studies: title, authors, year of publication, place of study, type of industry, type of
focus (industry, organisation, project, product or process), and brief methodology description
Software used for extracting data: Microsoft Access
Data synthesis Methods: narrative synthesis, developed categories from a detailed examination of all FCA studies
Presentation methods: tables, matrices and qualitative thematic analysis
(Wilson, 1992; Booth et al., 2011). A single technique is not suffi- those quality evaluation questions that are appropriate to the
cient to conduct a systematic review. A multiple approach is needed research question in the review process. The checklist for the
with a combination of search techniques to make sure that all quality assessment of FCA studies considers individual aspects of
relevant research has been identified (Petticrew and Roberts, 2008; the quality of FCA methods.
CRD, 2009; Booth et al., 2011).
The primary method for mapping the FCA literature was data-
base searching for original research papers in English language 4.4. Study selection process
journals. Well-known and highly relevant studies were reviewed in
order to isolate appropriate databases and search terms on each The process of selecting FCA studies based on the review pro-
database (e.g. CICA, 1997; Atkinson, 2000; Bebbington et al., 2001; tocol is presented in Fig. 2.
Taplin et al., 2006). The following databases were considered The combination of different search techniques provided 4381
appropriate for searching FCA papers: Google Scholar, Science records in total. Initial screening and examination of the titles and
Direct, Emerald Insight, Wiley Online and Web of Science. Key- abstracts excluded 4276 records where FCA was only mentioned
words used for the searches of each database were ‘full cost ac- (book reviews, comments or papers not related to FCA) or was of
counting’, ‘total cost accounting’, ‘full environmental cost secondary importance. The full text had to be assessed against the
accounting’, ‘total cost assessment’ and a combination of the inclusion criteria when the relevance of the study was impossible
following terms: ‘accounting’, ‘valuing’, ‘externalities’, ‘external to judge based only on the title and abstract. After more detailed
cost’, ‘social accounts’ and ‘environmental accounts’. Database examination another 53 papers were excluded from the review
searching was supplemented by grey literature searching, reference process. Consultation of the remaining papers with an expert on
list checking and citation searching to reduce the impact of publi- FCA resulted in one more FCA study being identified and added to
cation bias. Finally, the identified list of studies was sent to a highly the review. Fifty-three publications were selected for the quality
respected expert on FCA for consultation to make sure that all assessment and each study was examined in detail to assess the
relevant studies had been found. validity of its evidence base. The quality assessment based on study
design excluded three observational qualitative studies from the
4.3. Quality assessment review process due to their inability to answer the research ques-
tion. Four other studies did not provide sufficient information
No single and universal approach to assessing methodological about the method (system boundaries) and were also excluded
quality exists; therefore, the assessment should be restricted to from the review. Forty-six FCA studies were selected for the review
studies of a specific type that are best suited to address the process including 35 empirical (experiments and case studies) and
research question of the review (CRD, 2009; Denyer and Tranfield, conceptual FCA applications.
2009).
An initial quality evaluation was based on the type of study
design being used and its hierarchy (experimental trials, observa- 4.5. Data extraction
tional studies, expert opinion). However, grading studies based on
the study design hierarchy does not provide an adequate quality Data from 46 papers were extracted through the data extraction
assessment because it ignores variations in quality among studies form. A typical data extraction form contains the following details:
with the same design (CRD, 2009). Therefore, a detailed quality author and publication details, paradigm, aim and focus of the
assessment of each study was based on ‘quality instruments’ which paper, method details, theory or models (Jesson et al., 2011). The
can take the form of checklist or quality scores (Kitchenham and data extraction form for FCA studies included title, authors, year of
Charters, 2007; Petticrew and Roberts, 2008; Denyer and publication, place of study, type of industry, type of focus (industry,
Tranfield, 2009). Many quality checklists have been developed for organisation, project, product or process) and a brief method
different types of empirical studies (see Kitchenham and Charters, description. The database of FCA studies was then built with the
2007), but no standard and agreed set of questions exists. There- help of Microsoft Access software and based on the selected cate-
fore, Fink's (2014) suggestion has been adopted, which is to review gories. Furthermore, a short summary of each study was uploaded
available lists of questions in the context of this study and select into the database after detailed examination.
Records identified Records identified

through database through other
searching methods
n = 4328 n = 53
Records excluded
based on the title
and abstract
Records screened (n = 4276)
n = 4381 Not FCA study
n= 3934
FCA of secondary
importance
n = 342
Papers excluded
based on the
inclusion criteria
Papers assessed for (n = 53)
eligibility Not FCA study
n = 105 n = 10
No outcome
n = 43
Papers excluded
after the quality
Studies assessment
identified Publications meeting (n = 7)
from contact inclusion criteria Not relevant study
with expert n = 53 design
n=1 n=3
System boundaries
not clearly defined
n=4
Publications included in the review
n = 46
Duplications and review papers
n=9
Number of FCA applications
n = 35
Fig. 2. The FCA study selection process used in the literature review based on the review protocol.
4.6. Synthesising and analysing studies a) Cost focus e FCA study should include both internal and
external impacts when assessing the performance of an
The main intention of synthesising studies is to recognise pat- object.
terns in the evidence base; meta-analysis, narrative synthesis and b) System boundaries e although defining system boundaries
thematic synthesis are examples of the many approaches that can is always the choice of a specific company, it is also a
be applied to the systematic review process (Booth et al., 2011; distinctive factor between FCA methods. A simple two-point
Jesson et al., 2011). The quality assessment of FCA studies indi- scale (narrow and wide boundaries) was assigned to each
cated heterogeneity of the literature which prevents the meta- study to facilitate the analysis. The authors' interpretation of
analysis being applied for synthesising FCA studies. Hence, narra- narrow boundaries is that a company focuses only on its own
tive synthesis was applied to fully interpret the collected evidence. impacts (i.e. it follows the PPP principle). Wide boundaries
The narrative synthesis process was broken down into three steps: are interpreted as the extended system that may include
organising the description of studies into logic categories, analysing downstream impacts, upstream impacts or take the full life
findings based on each category and synthesising findings across all cycle approach.
studies (Petticrew and Roberts, 2008; Booth et al., 2011). c) Valuation techniques of social and environmental im-
There is no single approach for developing categories to orga- pacts e different FCA methods favour different valuation
nise studies (Petticrew and Roberts, 2008); therefore, the most techniques.
meaningful categories for this review were driven by the review d) Sustainability dimensions e FCA methods can focus on a
question and detailed examination of all FCA studies. Four major single dimension, a combination of any two dimensions or all
categories have been developed as the framework for the study three dimensions of sustainability.
assessment and these are:
Clear and detailed tables were developed based on these cate- incorporate the social element of sustainability into FCA studies.
gories to increase the transparency of the review. Each category Thus, since 2003 a number of studies have attempted to combine
was then described in a qualitative thematic analysis. Tabulating multiple sustainability dimensions into one decision-making tool
the study findings is an important step in the systematic review (see e.g. Baxter et al., 2003; Figge and Hahn, 2005; Taplin et al.,
process and in the narrative synthesis (Petticrew and Roberts, 2006).
2008; Denyer and Tranfield, 2009; Jesson et al., 2011). Most FCA studies applied at the organisational level used nar-
Tables present the essence of the study characteristic and highlight row boundaries (see Table 3). Measuring upstream and down-
the differences and similarities between the included studies stream impacts is often difficult if not impossible and depends on
(Jesson et al., 2011). the number of suppliers within the supply chain. Two exceptions
The final steps of the narrative synthesis were cross-tabulating relate to organisations that organise and control their activities on a
and cross-study synthesis (Petticrew and Roberts, 2008) to project basis. For example, organisations operating in the oil and
explore any analogies, similarities and differences between FCA gas industry start with exploration drilling, the design of a drilling
methods. Studies were first grouped together based on the com- platform, construction of the platform, production of oil and gas,
mon features in the developed categories. Then, a closer exami- and decommissioning of the platform (Bebbington, 2007). Life-
nation of each study within the group was performed to identify cycle thinking was dominant in the FCA assessment of projects,
how a given study relates to other studies within the group. It products and processes (Steen, 1999; Antheaume, 2004; Roth and
allowed for the isolation of stand-alone studies from others linked Ambs, 2004).
with a specific FCA method. The intention of FCA is to measure both internal and external
sustainability effects. Therefore, the majority of FCA studies (28
5. Results of the analysis applications) included both types of information, although the
study focus and number of indicators varied across them. Internal
The results of the review are presented in this section. It begins effects were only measured by two studies, where all of them
with a bibliographic analysis of FCA studies. Then, the FCA appli- represented the USEPA's method for FCA. The remaining four FCA
cations are elucidated based on the developed criteria. Finally, the experiments (case studies) focused only on valuing external envi-
FCA methods are identified through cross-study synthesis and their ronmental and social effects, for example Antheaume (2004), Bickel
main features are described. and Friedrich (2004) and Epstein et al. (2011).
Dose-response techniques dominate as the major valuation
5.1. Bibliographic analysis methods used in FCA studies. The damage cost approach has been
used in 17 FCA studies including Ontario Hydro (USEPA, 1996),
Forty-six relevant FCA studies were identified in the wider PowerGen (Atkinson, 2000) and the coal industry (Epstein et al.,
literature (see Appendix A). Journal articles and grey literature 2011). Cost of control techniques account for nine of the total
constitute the majority of these studies (41.5% each) while books methods used. They have been implemented in BSO/Origin
and book chapters account for 17%. The proportion of grey literature (Huizing and Dekker, 1992), the forestry industry (Rubenstein,
(such as technical reports, company reports, research reports and 1994) and Landcare Research (Bebbington and Gray, 2001).
conference papers) is large, which indicates its significant contri- Behavioural methods are rarely applied as the primary valuation
bution to the method's developments in this field. technique and they usually complement doseeresponse tech-
From 46 FCA studies, 35 empirical (experiments and case niques when the latter fail to provide estimates about the impact.
studies) and conceptual applications have been identified in The multiple valuation techniques have been implemented by
different settings (see Appendix B). The most intensive research has Steen (1999), Bickel and Friedrich (2004) and PUMA (2010).
been conducted in waste management (six studies), energy (five Traditional market methods constitute five of the primary valua-
studies) and oil and gas (four studies). Other sectors, such as tion techniques and are fundamental to the USEPA (1998) study for
forestry, water service, chemical, alcohol, automotive, coal, urban calculating up-front, operating and back-end costs of municipal
development, research and higher education report no more than solid waste management projects.
one or two applications of FCA methods. Nearly 46% of these studies
have been run at the organisational level including in such com- 5.3. FCA methods identified to date
panies as British Petroleum, Interface Europe, BSO/Origin, PUMA,
Volvo, AlcCo and ChemCo. Project-level applications (e.g. energy The outcome of past experimentation with FCA is the devel-
technology and waste management projects) constitute 37% and opment of ten FCA methods with differing levels of consistency in
industry-level applications (coal, oil and gas) 6%. Product-, process- their practical application (see Table 4). Most of these methods are
and material-level assessments account for no more than 11% of the still incomplete, with only a few practical applications. Some ap-
total FCA applications and these are mainly in the automotive, gas proaches are unique and stand-alone, while other methods have
and chemical sectors. been built by a number of related studies over a number of de-
cades. Table 4 indicates that the Sustainability Assessment Model
5.2. The analysis of findings based on developed categories (SAM) and Forum for the Future's (FFF) sustainability accounting
are two of the most commonly used FCA approaches. As such,
Thirty-five FCA experiments (case studies) were assessed based these two methods will be discussed in detail, with the other
on the developed criteria, which were: sustainability dimensions, approaches being discussed at a higher level by identifying their
system boundaries, valuation technique of social and environ- main features.
mental impacts and cost focus. This aided recognition of the simi-
larities and differences between FCA methods (Table 2). 5.3.1. The SAM
Up to 2003, the environmental and economic aspects of sus- The SAM is the outcome of cooperative work between British
tainability were dominant in FCA studies. The social dimension was Petroleum and the University of Aberdeen. It has been developed to
ignored, with minor exceptions of including human health impacts make external costs more central to organisational decision-
in studies such as USEPA (1996) and Steen (1999). Bebbington et al. making (Bebbington et al., 2007). It articulates economic,
(2001) recognised the need for a more integrated approach and to resource, environmental and social issues in a project's evaluation
Table 2
Methodological approaches applied in FCA studies in chronological order (from the oldest to the most recent studies).
Year of Object of the Sustainability System boundaries Cost focus Primary valuation Studies
study assessment dimensions methods
1992 Organisation En Narrow Internal þ External Avoidance cost (Huizing and Dekker, 1992)
1994 Organisation Ec þ En Narrow Internal þ External Abatement/Restoration (Rubenstein, 1994)
cost
1996 Organisation En þ HH Wide Internal þ External Damage cost (USEPA, 1996)
1997 Project En Wide External Damage cost (Bickel et al., 1997)
1998 Organisation Ec Narrow Internal Market methods (USEPA, 1998)
1999 Project Ec þ En Wide Internal þ External Damage cost (CWRT, 1999)
1999 Product En þ HH Wide Internal þ External Multiple (Steen, 1999)
2000 Organisation En Narrow þ tier 1 Internal þ External Avoidance/Restoration (Howes, 2000)
suppliers cost
2000 Organisation Ec þ En Narrow Internal þ External Damage cost (Atkinson, 2000)
2001 Organisation En Narrow þ tier 1 Internal þ External Restoration cost (Bebbington and Gray, 2001)
suppliers
2002 Organisation En Narrow Internal þ External Avoidance/Restoration (Howes, 2002)
cost
2002 Organisation En Narrow Internal þ External Avoidance/Restoration (Howes, 2002)
cost
2003 Industry In Wide Internal þ External Damage cost (Baxter et al., 2003)
2003 Organisation In Wide Internal þ External Damage cost (Baxter et al., 2003)
2003 Project In Wide Internal þ External Damage cost (Baxter et al., 2003)
2003 Project In Wide Internal þ External Damage cost (Bebbington and Frame,
2003)
2003 Material In Wide Internal þ External Damage cost (Baxter et al., 2003)
2004 Project Ec þ En Wide Internal þ External Damage cost (Roth and Ambs, 2004)
2004 Process En Wide External Multiple (Antheaume, 2004)
2004 Project En þ Sc Wide External Multiple (Bickel and Friedrich, 2004)
2005 Organisation In Narrow Internal þ External Market methods (Figge and Hahn, 2005)
2005 Project In Wide Internal þ External Damage cost (Cavanagh, 2005)
2006 Organisation In Narrow Internal þ External Avoidance/Restoration (Bent, 2006)
cost
2006 Organisation/product In Narrow/wide Internal þ External Avoidance/Restoration (Taplin et al., 2006)
cost
2006 Project In Wide Internal þ External Damage cost (Cavanagh et al., 2006)
2008 Organisation In Narrow Internal þ External Market methods (Figge et al., 2008)
2008 Project (Scheme) Ec Narrow Internal Market methods (Karagiannidis et al., 2008)
2009 Project In Wide Internal þ External Damage cost (Davies, 2009)
2009 Project In Wide Internal þ External Damage cost (Xing et al., 2009)
2010 Organisation En Wide (excl. Internal þ External Multiple (PUMA, 2010)
downstream)
2011 Industry En þ HH Wide External Damage cost (Epstein et al., 2011)
2014 Organisation Ec þ En Narrow Internal þ External Market methods (Debnath and Bose, 2014)
Ec e Economic, En e Environmental, Sc e Social, In e Integrated, HH e Human Health.
in the form of 22 performance indicators (see Table 5). Data for the offs and outcomes from a project in an effective and understand-
established performance indicators are collected in physical units able format (Frame and Cavanagh, 2009). However, even though
(i.e. through LCA, eco-balance and ecological footprint methods) the SAM takes a broader approach compared to the other FCA
and then translated into monetary values using a variety of mon- methods, it is not an absolute measure of the complexities of sus-
etisation approaches under the broad heading of the damage cost tainable development. The intention of the SAM is to enable ease of
approach (Frame and Cavanagh, 2009). A particular contribution use as opposed to the performance of complex and accurate anal-
and strength of the SAM is that it brings together all the elements of ysis (Bebbington, 2007).
sustainable development into a single tool and provides a The output of the assessment is a graphical presentation (called
comprehensive monetisation of the broader environmental and the SAM signature) of positive and negative impacts and an indi-
social issues which occur in the project life cycle (Xing et al., 2009). cator (the SAMi) that measures the level of sustainability of the
Hereby, the SAM has the ability to indicate the interrelationships project (Baxter et al., 2003). An example of the SAM signature for an
between all sustainability dimensions and communicate the trade- oil and gas field development project is presented in Fig. 3. Each
colour on the graph identifies a different performance indicator in a
given category measured in monetary terms. Bars above the hori-
zontal line represent the positive outcomes from the project, while
Table 3 bars below the horizontal line represent the negative impacts of the
The system boundaries identified in FCA studies.
project (Bebbington et al., 2007). The economic category measures
Assessment level Narrow boundaries Wide boundaries a value generated by the project from different stakeholder per-
Industry 2 spectives (e.g. taxes paid to the government and dividends paid to
Organisation 13 3 shareholders). The environmental category has been divided into
Project 1 12 resource and other environmental pollution impacts due to the
Product/process/material 4
resource-extracting and resource-intensive nature of the oil and
Table 4
FCA methods identified through the literature review.
Methodological Type of assessment Cost focus Scope Type of Related studies

stream (boundaries) information
1. SAM Integrated Damage cost Wide Internal and (Baxter et al., 2003); (Bebbington and Frame, 2003); (Baxter et al., 2004);
External (Bebbington and MacGreagor, 2005); (Cavanagh, 2005); (Cavanagh et al.,
2006) (Bebbington, 2007); (Bebbington et al., 2007); (Cavanagh et al.,
2007); (Xing et al., 2007); (Davies, 2009); (Frame and Cavanagh, 2009);
(Xing et al., 2009); (Fraser, 2012)
2. FFF's Environmental, Avoidance/Remediation Narrow Internal and (Gray, 1992); (Huizing and Dekker, 1992); (Rubenstein, 1994); (Howes,
sustainability Integrated (AlcCo and cost, Damage cost External 2000); (Bebbington and Gray, 2001); (Howes, 2002); (Bent and Richardson,
accounting ChemCo only) (ALcCo only) 2003); (FFF, 2003); (Howes, 2004); (Bent, 2006); (Taplin et al., 2006)
3. USEPA's Economic (one Market methods Narrow and Internal (USEPA, 1997); (USEPA, 1998); (Karagiannidis et al., 2008); (Debnath and
method environmental study) wide (One Bose, 2014)
external
study)
4. Monetised Environmental, Multiple Wide Internal and (Steen, 1999); (Antheaume, 2004); (Epstein et al., 2011)
LCA approach Human health External
5. SV concept Integrated Opportunity costs Narrow Internal and (Atkinson, 2000); (Figge and Hahn, 2005); (Figge et al., 2008)
External
6. PUMA E P&LA Environmental Multiple Wide Internal and (PUMA, 2010); (PPR, 2012);
(excluding External
downstream)
7. CWRT Economic, Damage cost Wide Internal and (CWRT, 1999)
Environmental External
8. Ontario Environmental, Damage cost Wide Internal and (USEPA, 1996); (CICA, 1997);
Hydro Human health External
9. Extended LCC Economic, Damage cost Wide Internal and (Roth and Ambs, 2004)
Environmental External
10. ExternE Environmental, Social Multiple Wide External (Bickel et al., 1997); (Krewitt, 2002); (Bickel and Friedrich, 2004)
Table 5
Impact categories used in the SAM (source: Baxter et al., 2003).
Economic impact Resource impact Environmental impact Social impact
Money to contractors Oil and gas Emission to atmosphere and sea Employment
Social investment Water Nuisance value (odour, noise) Health and safety
Reinvestment Energy Footprint Social impact of product
Dividends Raw materials Waste Tackling poverty and social exclusion
Taxes Intellectual property Equip people with skills to fulfil their potential
Physical infrastructure Reduce the potential of unit housing stock
Reduce crime and fear of crime
gas industry (Xing et al., 2009). The social category measures both These include offshore hydrocarbon development, landfill gas and
the negative and positive social outcomes from the project (e.g. tree-planting projects (Baxter et al., 2003), most recently in the
negative health and safety impacts and social benefits of jobs) urban development industry (Xing et al., 2009) and higher educa-
(Bebbington, 2007). tion sector (Davies, 2009). Furthermore, these ideas have been
The SAM was originally developed for the oil and gas industry taken forward in other parts of the world. For example, most of the
but has since been applied in many different settings in the UK. New Zealand FCA studies are focused on developing and exper-
imenting with an Australasian version of the SAM, which has also
resulted in collaborative studies (e.g. Bebbington and Frame, 2003;
Bebbington et al., 2007). New Zealand's applications of the SAM
include organic recycling, waste management, urban transport and
housing developments (Cavanagh et al., 2007).
The SAM has been developed mainly for the purpose of project
evaluation and internal decision-making (Bebbington, 2007),
although it has been proven to be an ideologically open and flexible
concept. SAMs have subsequently been applied in other settings
and configurations including the assessment of the whole industry
and at the organisational, project and material level (Baxter et al.,
2003). Furthermore, there are no restrictions on taking this
concept forward and extending the boundaries of the assessment at
the policy, product, process or strategy level.
5.3.2. FFF's sustainability accounting

The origin of the FFF's method can be traced back to 1992 and its
links with the early work of BSO/Origin (Huizing and Dekker, 1992),
Fig. 3. The SAM signature developed for the oil and gas organisation (source: Rubenstein (1994) and the development of the sustainability cost
Bebbington et al., 2007). calculation (SCC) concept (Gray, 1992; Bebbington and Gray, 2001).
The idea behind the SCC is to estimate the additional cost to an This concept has been narrowly designed for a municipal waste
organisation of avoiding a deterioration in the condition of the management project and examples of its further application can be
planet as a result of its activities (Gray, 1992). In contrast to the SAM, found in the USA (USEPA, 1998), Greece (Karagiannidis et al., 2008)
the valuation method used in the SCC is avoidance cost. The FFF's and India (Debnath and Bose, 2014). A municipal solid waste
method is broadly based on Gray's SCC but Forum took this concept project in India is the only recorded attempt of extending the
forward by focussing on sustainability dimensions other than USEPA's method to environmental impacts.
environmental, using restoration cost as the valuation method in
addition to avoidance cost and expanding the traditional profit and 5.3.4. Monetised LCA
loss accounts and balance sheets by recognising sustainability lia- The monetised LCA approach classifies all methods (not neces-
bilities (Bebbington et al., 2001). These liabilities are measured and sarily related to each other) that use LCA as the primary tool to
reported during the accounting period (usually one year). In tradi- identify externalities and a mixture of techniques to value these
tional accounting, the profit and loss accounts, balance sheet and external impacts. This approach has been adopted inter alia by
cash flow statements are used as communication tools between a Antheaume (2004) in an FCA experiment applied to an industrial
company and external stakeholders (Atrill and McLaney, 2006). process, Epstein et al. (2011) in an assessment of the external effects
Hence, the FFF's method is classified as a financial accounting tool of the coal industry and Volvo in its Environmental Priority Stra-
rather than a management accounting tool as in the case of the SAM. tegies (EPS) in product development (Steen, 1999).
In order to standardise the method, FFF created the Sigma The EPS system is based on the ISO 14040 series as a decision-
guidelines for its implementation (see Bent and Richardson, 2003; making tool for the internal product development process,
FFF, 2003). The Sigma guidelines disaggregate the components of although it can also be used for external purposes in Environmental
the triple bottom line of sustainability into five major capitals: Product Declaration (EPD) (Steen, 1999). Certified EPD is a tool for
manufacturing, financial, human, social and natural. Information communicating LCA-based information with external stakeholders
about these capitals is provided in three different dimensions (Bent (Steen et al., 2008a). The EPS system is used in EPD as a method for
and Richardson, 2003): quantifying environmental impacts (Bogeska €r et al., 2002); how-
ever, its primary intention is to support product design engineers
Timing: is it the flow of goods (services) or a snapshot in time of by selecting components and subassemblies that minimise envi-
the stock? ronmental impact (Graedel and Allenby, 1998). EPS assesses and
Location of impact: is the impact within or beyond the com- aggregates the environmental impacts into a single unit called
pany's boundaries? environmental load unit (ELU) per kilogramme of material used.
Type of impact: is the impact economic, environmental or ELU has been developed by Volvo as a rating method that compares
social? the environmental impacts of any material to impacts resulting
from 1 kg of methane (Mayyas et al., 2012). FCA methods (such as
Sustainability impacts are converted into monetary values willingness-to-pay) have been integrated within this tool to facili-
through avoidance/restoration valuation methods and reported tate the analysis and decisions by weighting competitive factors
either in the extended profit and loss account or in the extended against each other (Steen, 1999). However, the results of the EPS
balance sheet (Bent and Richardson, 2003). Practical application of analysis are still reported in ELU so that the EPS users would not
the Sigma guidelines can be found mainly at the organisational attempt to apply a discount rate to numbers and to emphasise that
level, such as in Interface Europe (Howes, 2000), Anglian Water, there is something more behind the numbers than just ‘dollars’
Wessex Water (Howes, 2002) and AlcCo (Bent, 2006). A single (Resetar et al., 1998).
attempt at extending this system to the product level is recorded at The main limitation of this approach is that it primarily values
ChemCo (Taplin et al., 2006). the environmental dimension of sustainability while social and
In contrast to the SAM, FFF's method follows the PPP principle, economic elements are ignored, with the exception of human
therefore they are advocates of narrow boundaries (Howes, 2000, health impacts. In order to provide a comprehensive picture of
2002). Although the Forum's FCA is the second major method in sustainability effects, it would have to be supplemented by other
this field, it is still incomplete for use in a wider application, which tools that have the ability to integrate environmental, social and
has been recognised by the Forum itself. For example, none of the economic effects into a single framework.
FFF's studies tackled wider economic impacts, and social effects
were only included in the most recent applications (Davies, 2009). 5.3.5. Sustainable value (SV) concept
It has also shown less flexibility and adaptability to different con- Figge and Hahn (2004) developed a valuation methodology
figurations and settings when compared to the SAM. which allows an estimation of the cost of sustainability capital and
the sustainable value created by a company. The concept has been
5.3.3. The USEPA's method applied mainly in the oil and gas and automotive industries (see
USEPA defined FCA as ‘a systematic approach for identifying, Figge and Hahn, 2005; Figge et al., 2008). The capital and value
summing and reporting the actual cost of solid waste management’ added approach is not a new concept and it was previously adapted
(USEPA, 1997). Its method is based on traditional market techniques by Atkinson (2000) in a corporate genuine saving (CGS) rate. The
to account up-front, operating and back-end costs of municipal idea behind CGS is that a company should adjust its net profit
solid waste management projects. This definition of FCA neglects (value added) to the environmental damage caused by its activities
the major principle behind this concept of allocating both direct and eventually receive a green value added indicator. The innova-
and indirect costs. Instead, USEPA focuses only on costs that are tion in the SV concept is that it integrates other forms of capital
relatively easy to value in the marketplace (primarily economic). (social and financial) with the use of natural capital and applies
Other important costs, such as property damage, injuries, costs of traditional market valuation techniques (opportunity cost) to
remediation, social costs, environmental externalities and up- evaluate the use of all forms of capital (Figge and Hahn, 2005).
stream and downstream LCA costs are not included. The USEPA Opportunity cost has been mainly applied in the valuation and
handbook identifies and defines these costs but does not explain allocation of economic capital. The authors of SV took this concept
how to value them or incorporate them into the decision-making forward and employed it to estimate the value of environmental
process (USEPA, 1997). and social capital.
The main limitation of the SV concept is that it includes only how they can be internalised (Bickel et al., 1997; Bickel and
nine indicators to assess sustainability of an organisation (one Friedrich, 2004). Over two decades of development turned the
economic, six environmental and two social), which can be partly ExternE label into a well-recognised standard source of external
explained by the algorithm used for calculating the value added of cost data (Krewitt, 2002). The method uses an Impact Pathway
each capital. One of the principles behind estimating SV is to Analysis (IPA) to calculate damage costs, which follows four major
calculate the efficiency of resources used by the company and its steps: pollutants from a specific site are measured; their atmo-
benchmark. The benchmark is usually represented by the weighted spheric dispersion and increased concentrations in all affected re-
average of the whole industry in which the company operates. gions are calculated; the physical damage (impact) from increased
Hence, the SV calculations rely heavily on figures reported by other concentration is estimated; and the physical damage is converted
organisations. Therefore, the SV assessment is only as compre- into monetary units through multiple valuation methods (Friedrich
hensive as the data published by competitors in the industry. and Bickel, 2001). The ExternE project represents a pragmatic and
scientific-based approach but its applications are mainly focused
5.3.6. PUMA environmental profit and loss account (E P&LA) on energy-related external environmental and social issues. Hence,
PUMA, with the assistance of Trucost and Pricewaterhou- companies from the energy sector can only use their approach and
seCooper, has developed the first-ever E P&LA by calculating the standards to value externalities. For other businesses it can be used
economic value of environmental impacts from PUMA's operations as a source of damage cost figures for a number of environmental
and supply chain. They used an economic InputeOutput (IeO) pollutants and human health impacts.
model to calculate upstream impacts (see Hendrickson et al., 1998; The final FCA method is an extension of the traditional Life Cycle
Joshi, 1999; Wiedmann and Lenzen, 2009 for details). The E P&LA Costing (LCC) tool developed to determine the cost of energy of 14
includes the most significant company impacts: water usage, electricity generation technologies (Roth and Ambs, 2004). LCC
greenhouse gas emissions, other air pollution and waste produc- identifies and quantifies all significant costs (acquiring, owning,
tion. The company's method used for the E P&LA met with a pos- operating and disposal) of physical assets throughout their useful
itive response from the general public. It also received positive lives (Woodward, 1997). Roth and Ambs (2004) took this concept
feedback from the panel of experts who assessed the validity of this forward by adding costs that are usually omitted in LCC evaluations,
approach. They all agreed that this is the only currently available such as damage from air pollution, energy security and other
and acceptable method to measure upstream and downstream environmental externalities. The need for incorporating external-
impacts of an organisation (PPR, 2012). ities into LCC was also recognised by the Society of Environmental
Although PUMA's approach is the first of its kind because it Toxicology and Chemistry (see Steen et al., 2008b) but the majority
attempts to estimate the ecological footprint of the whole com- of examples provided in the book still represent the conventional
pany's supply chain, experts have agreed that PUMA's method re- LCC.
quires standardisation or a more accessible methodology should be This section has presented all of the FCA methods identified
developed to be used by other organisations (PPR, 2012). Further- through the literature review process. The next section discusses
more, PUMA managed to collect only 16% of the primary data which which of these methods is appropriate for the automotive setting.
questions the reliability of their assessment. Creating an E P&L
account for more complicated industries (such as automotive or 6. Discussion
aerospace) has many hurdles, the most important being the size
and complexity of the supply chain. This section first critically analyses the existing applications of
FCA in the automotive industry. It then proposes the SAM as a well-
5.3.7. Other FCA methods developed and potentially practical FCA method to be applied in
Ontario Hydro was a pioneer in applying damage cost and the automotive industry. Finally, the key methodological consid-
integrating social-related externalities (mainly human health ef- erations for applying the SAM in the automotive setting are
fects) in FCA and hence, it could be an inspiration for other FCA discussed.
practitioners. Certain similarities occur (besides adopting the
damage cost function) in their approach to the SAM. Both use the 6.1. The automotive FCAs e need for a more comprehensive system
full life cycle approach although Ontario included only impacts
which are under control of the organisation. Furthermore, they The literature review recognised two attempts to apply FCA in
both use, integrate or at least refer to the Multi-Criteria Analysis the automotive environment: Volvo's EPS system and the SV
(MCA) methods in their approach (see USEPA, 1996 and Frame and concept, although only Volvo truly applied FCA in the automotive
Cavanagh, 2009). However, a lack of further publications and organisation. The intention of the EPS system was to create a lan-
willingness to talk about the experiment by Ontario Hydro makes it guage understandable by everyone within the organisation to
impossible to determine how this method has been further support sustainable decisions in the product development envi-
developed (Bebbington et al., 2001). ronment (Steen, 1999). The purpose of the SV concept was to
The Center for Waste Reduction Technology (CWRT) belongs to compare the efficiency of various car manufacturers in using eco-
the American Institute of Chemical Engineers and they use the term nomic, environmental and social capital compared with their in-
‘Total Cost Assessment’ (TCA) to define FCA. The intention of TCA dustrial peers based on widely available data from sustainability
was to provide the process of quantifying all environmental and reports (Figge et al., 2008). It does not demonstrate how the SV
health costs, both internal and external, associated with business concept can support automotive organisations in making complex,
decisions (CWRT, 1999). Bebbington et al. (2001) argued that TCA sustainable decisions. A completely opposite approach to FCA has
does not introduce anything new to the FCA literature apart from been demonstrated by Ford in the development of Ford of Europe's
providing a wide range of external costs for any future FCA Product Sustainability Index (PSI) (Mayyas et al., 2012). PSI is a
experiments. simple sustainability management tool (also based on the ISO
The External Costs of Energy (ExternE) project is a major 14040 series) that aims to support engineers in making sustainable
research programme launched by the EC at the beginning of the decisions when developing a car (Schmidt, 2007). PSI focuses on
1990s to provide a scientific background for quantifying energy- the major economic, environmental and social attributes of a
related externalities (including from transport) and guidelines on vehicle which are under the control of the product development
department such as life cycle global warming, life cycle air quality Both EPS and PSI showed that life cycle thinking is deeply
potential, sustainable materials, restricted substances, drive by ingrained in the automotive industry. The SAM (opposite to the
noise, safety, mobility capability and life cycle ownership costs FFF's method) takes the full life cycle approach which creates a
(Schmidt, 2006). The results of PSI are not reduced to a single unit basis for assessing the sustainability of an automobile. An assess-
because, as the authors of PSI suggest, sustainability is not one- ment of an activity which is blind to upstream and downstream
dimensional by definition and therefore should always be effects cannot fully address sustainability issues (Bebbington,
measured using different indicators (Schmidt and Taylor, 2006). 2007). In industries such as automotive or oil and gas, the down-
Both Volvo and Ford's systems demonstrate two alternative stream sustainability effects are the outcome of decisions made
approaches for measuring sustainability in the automotive business before that point in time in the product chain. Furthermore, the life
but neither of them are without flaws. Volvo's EPS only covers the cycle approach eliminates the risk of shifting the environmental
environmental burdens of the vehicle's life cycle and it uses the and social burdens from one part of the system to another in the
non-standardised ELU, which still lacks international approval to supply chain. For example, replacing conventional cars with electric
measure and aggregate environmental impacts (Mayyas et al., ones would eliminate air pollution from the customer use phase at
2012). Although Ford's PSI attempts to reflect the triple bottom the expense of increased pollution from power plants and battery
line vision of sustainability, it still suffers from a lack of complete manufacturing facilities (Friedrich and Bickel, 2001). Integrating
coverage of sustainability metrics. Only eight sustainability metrics the SAM with LCA technologies gives a scientific background to the
(five environmental, two social and one economic) have been assessment of a car by following the widely accepted ISO 14040
incorporated into the PSI (Schmidt and Taylor, 2006). The authors of standards.
the PSI explain that it focuses only on key, controllable issues that
are influenced by the design department (Schmidt, 2006). The idea 6.2. Applying the SAM in the automotive industry e methodological
is that the meaning of sustainability is then translated to other considerations
business functions (in particular manufacturing, human resources
and external affairs) so that each department can concentrate on its The original SAM was developed for the oil and gas industry;
own sustainability issues. This approach needs to be coordinated to adapting this method to the conditions of the automotive industry
avoid overlapping and double counting (Schmidt and Taylor, 2006). will require focussing on the core sustainability issues facing
Ford suggested that the PSI fits perfectly within its own design automotive companies. Nowadays, a typical car has to be 95%
process and culture but it is not necessary for it to fit other orga- recoverable and 85% recyclable based on the target set by the EU;
nisations (Schmidt, 2006). therefore, significant resource impacts to be considered are the
The limitations of EPS and PSI indicate that a more compre- recyclable and non-recyclable materials used to make a car, vehicle
hensive and complete system is needed for the automotive appli- life cycle energy consumed (Mayyas et al., 2012) and life cycle
cation to support sustainable decisions. This system can take a water consumption, mainly from production areas of die casting,
number of different forms but building it on the FCA concept has mechanical processing and paint finishing (Enderle et al., 2012).
the major advantage of providing a complete picture about the Nearly 80% of the car's total impacts result from fuel combustion
sustainability performance of a car by measuring internal and (Orsato and Wells, 2007), hence all the major forms of pollution
external impacts and supplying organisations with both physical (such as greenhouse gases, volatile organic compounds, chloro-
and monetary data depending on the organisation's needs and fluorocarbons sulphur dioxides, nitrogen oxides and other toxic
culture. Such a system can be aligned with some principles of substances and heavy metals) associated with the life cycle energy
Volvo's and Ford's approaches (e.g. taking the full life cycle and fuel consumption of a car should be distinguished (Graedel
perspective) and supplemented with FCA methods. The evidence and Allenby, 1998; Mildenberger and Khare, 2000). Resource and
shows that the SAM potentially represents a well-developed FCA environmental impacts of an automobile are mostly negative;
approach available in the literature that can support the con- however, the economic and social categories may also include
struction of such a system. positive flows. For example, Ford's PSI measures the economic
The SAM, in contrast to other FCA methods, provides a performance of a car only from the cost perspective (Mayyas et al.,
comprehensive picture of sustainability performance by covering 2012) while positive figures such as gross profit, revenues from
and monetising a wide range of economic, environmental and so- selling parts, maintenance and financial service, are missing. All
cial assessment criteria. The original SAM uses up to 22 impact major positive and negative social effects of an automobile have
categories in total, which is the optimal number to retain a been already captured by the PSI system, such as safety, mobility
manageable model and still provide a clear picture of the sustain- capability, exterior noise and vehicle interior air quality (Schmidt,
ability performance of a car. Other FCA methods cover only one or a 2006). The literature distinguishes other important social flows
mixture of two sustainability dimensions. Even if an integrated that should be considered, including car vibrations (Makhsous
approach is adopted (for example, FFF and the SV concept), one or et al., 2005), human health impacts from the external air quality
two metrics usually represent social and economic dimensions. (Bickel et al., 1997) and product-based employment through the
Furthermore, the SAM is the only FCA method that represents the life cycle (Schmidt, 2007). The discussed assessment criteria are
MCA approach rather than a pure accounting tool (Frame and only proposals and they cannot be considered as comprehensive
Cavanagh, 2009). MCA technologies are characterised by their and exhaustive. They rather emphasise the importance of
high flexibility and adaptability to a number of decisions which the extending the existing systems (such as PSI and EPS) to other
SAM has certainly demonstrated in the last couple of years. Auto- sustainability measures.
mobile manufacturers need flexible tools to support decisions at Regardless of whether the SAM is applied in the automotive or
different levels and in different configurations, which include: any other industry, the methodological limitations of FCA (such as
product mix, manufacturing process design, assessment of trans- monetisation, cost allocation, reliability and validity issues) should
port modes, product disposal (recycling) strategies, comparing be considered. Solving the issues of measuring sustainability in a
performance across facilities and assessing pollution prevention linear form is not straightforward and requires an individual
projects and technologies (Mayyas et al., 2012). The SAM can sup- approach. Volvo argues that there is nothing wrong in supplying
port all corporate functions by adapting assessment criteria to the sustainability information in monetary values for those who want
characteristics and needs of a specific business unit. to see it. The designers at Volvo claim that they make several
thousand decisions every year and that thousands of people are to sharpen analysis and discussion around these issues (Bebbington
involved. Hence, it became critical to implement everyday language et al., 2007). It is intended to be relatively easy to understand for
and thinking that could be understood in different business areas everyone within an organisation, to be run at minimum cost and be
(Steen, 1999). Existing monetary techniques for valuing external- able to generate a quick view of sustainability performance in the
ities may not be perfect and provide only rough numbers; however, early phases of the product (project) development (Bebbington,
as Rubenstein (1992) concluded, it is still better to be approxi- 2007), which is essential in a normal automotive product-
mately right than precisely wrong. Any errors and uncertainties developing environment (Steen, 1999).
associated with environmental and social estimates in the context
of specific decisions can be managed by applying statistical and 7. Conclusions
mathematical models (i.e. sensitivity analysis) (Steen, 1999; Guine e
et al., 2002; Bickel and Friedrich, 2004). Furthermore, the SAM does This paper provides helpful clues for researchers interested in
not insist on placing a monetary value on impacts for which exploring full cost accounting by reviewing, analysing and syn-
monetisation is inappropriate and for matters of systems thesising the broad range of relevant sources from diverse fields in
complexity and scientific uncertainty (Bebbington et al., 2007). A this topic area. A comprehensive literature review of 4381 papers
lack of widely accepted standards poses an issue for comparing and related to FCA methods was undertaken. It used a systematic
auditing the results of FCA exercises. However, as long as the approach to extract ten important FCA methods and these were:
company is transparent with its approach, assumptions and limi- the SAM, FFF's sustainability accounting, monetised LCA, SV
tations and reports disaggregated data with both monetary and concept, E P&LA, extended LCC, CWRT, Ontario Hydro, ExternE and
physical units, the results of valuing externalities can be verified USEPA's method. Based on a careful examination and critical
(Bickel and Friedrich, 2004). analysis of each approach and existing automotive sustainability
The allocation of sustainability impacts (costs) is an issue measures, the SAM developed by British Petroleum and Aberdeen
relating not only to the SAM, but is a common problem in many University has been proposed as a well-developed and potentially
sustainability-measuring systems. For example, LCA borrows cost practical tool for application in an automotive setting. The SAM can
allocation methods from managerial accounting as the allocation be used by both academics and practitioners to translate a range of
procedure in a multiproduct system (Luo et al., 2009). Although conflicting sustainability information into a monetary unit score.
LCA may resolve the issue of allocating a specific impact to the This is an effective way of communicating trade-offs and outcomes
particular product, it does not reveal where in the entire process for complex and multi-disciplinary sustainability decisions in the
chain this impact occurred (Steen, 1999). LCA emphasises a pre- automotive sector. Its measurement of a broad range of economic,
cise accounting of all material flows (upstream and downstream) environmental, resource and social effects (both internal and
and since these flows occur at many geographically different external) is currently lacking within the automotive industry. Its
points under a variety of different conditions, it is not possible to other strengths are the ability to provide monetary metrics
track the local details of all emissions (Friedrich and Bickel, together with physical metrics for sustainability assessment, its
2001). flexibility and the ability to combine multiple sustainability
In LCA, all emissions throughout the entire process chain are dimensions.
aggregated into the specific impact categories and multiplied by The original SAM was developed for the oil and gas industry;
site-independent impact indices (Guine e et al., 2002). In order to therefore, applying this method in the automotive context will
allocate a particular cost (impact) to a specific site or company, a require the development of a new set of assessment criteria. Both
detailed analysis is required (e.g. Impact Pathway Analysis) which Volvo's EPS and Ford's PSI methods do not offer complete coverage
can trace the passage of a pollutant from where it was emitted to of the sustainability metrics. Consequently, future research should
the affected receptor (Bickel and Friedrich, 2004). In principle all focus on developing a framework for the automotive SAM that will
life cycle costs and damages should be evaluated by a site-specific contain a comprehensive and complete coverage of impact cate-
IPA but in practice this is time-consuming, expensive (the work gories for the sustainability assessment of an automobile. Assess-
requires input from a wide range of professions such as epidemi- ment criteria mentioned in this paper (such as recyclable and non-
ologists, ecologists, economists, dispersion modellers and engi- recyclable materials, vehicle life cycle energy and water consumed,
neers) and too complex for automotive organisations as they need all the forms of air, water and soil pollution, gross profit, safety,
to track a large number of downstream and upstream processes and mobility, noise, vibration, vehicle interior air quality, human health
flows (Friedrich and Bickel, 2001). Furthermore, the emissions from impacts from the external air quality and employment) are only
cars vary over time as well as by location, while the IPA method- proposals and cannot be considered as complete and exhaustive.
ology is time- and location-dependent; therefore, the recommen- The people who developed the original SAM suggest that sustain-
dation of ExternE methodlogy is to use LCA in combination with IPA ability metrics should be developed with the assistance of experts.
to get a complete assessment of external costs (Bickel and Friedrich, Hence, specialists (both academics and practitioners) in the auto-
2004). The SAM already utilises LCA as a means to generate input motive industry should be consulted to refine and select sustain-
data, which can then be converted into monetary values. The ability assessment criteria which can be used as a framework for
advantage of this approach is that most automotive organisations the construction of the automotive SAM.
report their sustainability performance in LCA format, thus they
already have well-developed LCA capabilities. Acknowledgements
This article proposes the SAM as a useful tool that automotive
organisations should consider in their sustainability assessment We are grateful to Jan Bebbington for the consultation and
toolbox to support more informed choices. The authors of the SAM extremely valuable comments on the full cost accounting bibliog-
explain that they developed a decision-supporting and not a raphy. We express special thanks to Amy Grove for consultation on
decision-making tool. It is important to understand that the SAM the methodology used in this paper. We also thank the Engineering
does not provide the ultimate answer for decision-makers but and Physical Sciences Research Council and Jaguar Land Rover for
rather facilitates the judgement and reasoning process funding this research (EP/I01585X/1). Finally, we thank anonymous
(Bebbington, 2007). It is an effective tool to indicate the source and reviewers for their comprehensive comments on this paper. All
magnitude of issues within an organisation and provide the means data are provided in full in the results section of this paper.
Appendix A. FCA studies identified in total.
Author (year) Type of document Published by
Books and book chapters:

Antheaume (2007) Book chapter Routledge
Baxter et al. (2004) Book chapter Earthscan
Bebbington (2007) Book The Chartered Institute of Management Accountants
Bent (2006) Book chapter Springer
Howes (2000) Book chapter Edward Elgar Publishing Limited
Howes (2002) Book The Chartered Institute of Management Accountants
Howes (2004) Book chapter Earthscan
Rubenstein (1994) Book Quorum Books
Journal articles:
Antheaume (2004) Journal paper European Accounting Review
Atkinson (2000) Journal paper Journal of Environmental Planning and Management
Baxter et al. (2003) Journal paper Offshore Europe
Bebbington et al. (2007) Journal paper Ecological Economics
Bebbington and Frame (2003) Journal paper Chartered Accounting Journal of New Zealand
Bebbington and Gray (2001) Journal paper Critical Perspectives on Accounting
Cavanagh et al. (2006) Journal paper Australasian Journal of Environmental Accounting
Debnath and Bose (2014) Journal paper Resources, Conservation and Recycling
Epstein et al. (2011) Journal paper Ecological Economics Reviews
Figge and Hahn (2005) Journal paper Journal of Industrial Ecology
Frame and Cavanagh (2009) Journal paper Accounting Forum
Fraser (2012) Journal paper Accounting, Auditing & Accountability Journal
Gray (1992) Journal paper Accounting Organisations and Society
Huizing and Dekker (1992) Journal paper Accounting Organisations and Society
Karagiannidis et al. (2008) Journal paper Waste Management
Krewitt (2002) Journal paper Energy Policy
Roth and Ambs (2004) Journal paper Energy
Taplin et al. (2006) Journal paper Business Strategy and the Environment
Xing et al. (2007) Journal paper Accounting Forum
Grey literature:
Bebbington et al. (2001) Research report Certified Accountants Educational Trust
Bebbington and MacGreagor (2005) Research report RICS Foundation
Bent and Richardson (2003) Technical report Forum for the Future
Bickel and Friedrich (2004) Technical report The European Commission
Bickel et al. (1997) Technical report The European Commission
Cavanagh (2005) Technical report Environment Waikato - Regional Council
Cavanagh et al. (2007) Conference paper International Conference on Whole Life Urban Sustainability and its Assessment
CICA (1997) Research report The Chartered Institute of Canadian Accounting
CWRT (1999) Technical report American Institute of Chemical Engineers
Davies (2009) Conference paper 1st International Conference on Sustainable Management of Public and Not For Profit Organisations
FFF (2003) Technical report Forum for the Future
Figge et al. (2008) Research report Sustainable Value Research Ltd
PPR (2012) Company report Kering
PUMA (2010) Company report PUMA
Steen (1999) Technical report Chalmers University of Technology
USEPA (1996) Technical report USEPA
Xing et al. (2007) Conference paper International Conference on Whole Life Urban Sustainability and its Assessment
Appendix B. Empirical and conceptual applications of FCA

applied in different settings.
Industry/application Assessment level Study
Information technology Organisation (Huizing and Dekker, 1992)

Forestry Organisation (Rubenstein, 1994)
Project (Baxter et al., 2003); (Bebbington, 2007); (Bebbington et al., 2007)
Energy Organisation (USEPA, 1996); (CICA, 1997)
Organisation (Atkinson, 2000)
Project (Baxter et al., 2003); (Bebbington, 2007); (Bebbington et al., 2007)
Project (Krewitt, 2002); (Bickel and Friedrich, 2004)
Project (Roth and Ambs, 2004)
Carpet manufacturing Organisation (Howes, 2000)
(continued on next page)
(continued )
Industry/application Assessment level Study
Research Organisation (Bebbington and Gray, 2001)

Oil and gas Industry (Baxter et al., 2003)
Organisation (Baxter et al., 2003); (Bebbington and Frame, 2003); (Bebbington and MacGreagor, 2005); (Bebbington, 2007); (Bebbington
et al., 2007)
Organisation (Figge and Hahn, 2005)
Process (Antheaume, 2004)
Hydrocarbon Material (Baxter et al., 2003)
development
Water service Organisation (Howes, 2002); (Howes, 2004)
Organisation (Howes, 2002); (Howes, 2004)
Waste management Organisation (USEPA, 1998)
Organisation (Debnath and Bose, 2014)
Project (CWRT, 1999)
Project (Karagiannidis et al., 2008)
Project (Cavanagh et al., 2006)
Project (Cavanagh, 2005); (Frame and Cavanagh, 2009)
Alcohol Organisation (Bent, 2006)
Chemical Organisation/ (Taplin et al., 2006)
product
Transport Project (Bickel et al., 1997)
Project (Cavanagh et al., 2007)
Housing development Project (Cavanagh et al., 2007); (Frame and Cavanagh, 2009)
Higher education Project (Davies, 2009)
Urban development Industry (Xing et al., 2007); (Xing et al., 2009)
Coal Industry (Epstein et al., 2011)
Sportswear Organisation (PUMA, 2010); (PPR, 2012)
Automotive Organisation (Figge et al., 2008)
Product (Steen, 1999)
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Contents lists available at ScienceDirect

Journal of Cleaner Production

A comprehensive review of full cost accounting methods and their

Step Research question/Methods

Review question What FCA methods have been developed to date?

Records identified Records identified

Ec e Economic, En e Environmental, Sc e Social, In e Integrated, HH e Human Health.

Methodological Type of assessment Cost focus Scope Type of Related studies

Economic impact Resource impact Environmental impact Social impact

5.3.2. FFF's sustainability accounting

Appendix A. FCA studies identiﬁed in total.

Author (year) Type of document Published by

Books and book chapters:

Appendix B. Empirical and conceptual applications of FCA

Industry/application Assessment level Study

Information technology Organisation (Huizing and Dekker, 1992)

Industry/application Assessment level Study

Research Organisation (Bebbington and Gray, 2001)

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