Over time, businesses worldwide have started to
focus more in their performance on the environment. This increase of attention
towards environmental policies has come not only as a result of pressure
exerted by the external actors, but also as a result of the progress in the
culture and systems management. It is difficult to see that these new
approaches have significantly affected the managerial decisions.
Environmental costs are costs related to current
or potential degradation of natural assets as a result of the economic
activities. Businesses have influence on the environment and nowadays this is
not just a hypothesis, but also a fact, which is accepted by the companies across
the globe. Businesses with importance ethics try to reduce their impact on the
environment at minimum levels.
Negative Impacts on the environment are not
insignificant and furthermore have long-term effects even in future
generations. Environmental pollution, noise pollution or deforestation are only
some of the most common damages. Elimination of green spaces, toxic waste or
other negative effects caused by businesses operating in a certain place, makes
people’s lives and the lives of future generation more difficult.
It is for this reason that during the last
years, public sensitivity has seen a considerable increase in forcing companies
to increase their efforts in minimizing negative effects in environment. In
addition, the governments of the developed countries and not only, have adopted
a series of laws with the sole purpose of protecting the environment and
perhaps improving it for the generations to come.
Environment and firms
“environment” has a very broad definition, but it is most commonly
used to describe the naturally occurring environment. The environment has the
ability to change for better or worse as time goes by. Firms want to increase
pressure to reduce their environmental impact. To help towards this goal it is
vital to understand the full range of environmental costs. Environmental costs
can be split in two categories. Internal costs and external costs. Each of them
shows the methods to be use.
These are costs that directly impact the income
statement of a company. The internal costs are not difficult to be explained.
Those costs are important because the business bases its price on. Internal
costs include costs like material, energy, labor, plant, equipment and overheads.
These costs are not included
in what the business bases its price on.
These include, the cost of disposing of the product at the end
of its useful life, the environmental degradation caused by the
wastes from production or the cost of health problems caused by
harmful materials. External costs have larger definitions than the internal
costs. The external costs are not included in the price of a product even
though they still have to be paid. Society ends up paying them through taxes and
insurance payments and also through losses in environmental.
The present and future of environmental costs
Nowadays businesses have as
their focus on profit so their main goal is to earn more and have a better
financial stability. Working in this way affects the environment making it
worse. Even now there are some rules, which stop the firms that work in an
illegal form. Not only in Albania but even in other countries the firms neglect
the environment in exchange of the profit. Some statistics show that different
countries will have a huge change in the future.
Some scientific studies have
LONDON, — Over 70 per cent of the Earth’s land
surface could be affected by the impacts of roads, mining, cities and other
infrastructure developments in the next 30 years unless urgent action is taken.
Asia, which includes areas such as the Arabian Peninsula, is likely to be the
worst affected with well over 90 per cent of the population expected to be
living in areas with “severe water stress” by 2032.
America and the Caribbean region are likely to be the hardest hit with more
than 80 per cent of the land affected, closely followed by Asia and the Pacific
region. There, over 75
of the land may well be affected by habitat disturbance and other kinds of
environmental damage as a result of rapid and poorly planned infrastructure
have occurred in areas such as river and air quality in places like North
America and Europe.
current situation in Albania is not a good one. For most part of businesses
that operate in our country, the concept of environmental costs is unknown. Due
to the financial instability and the low economic growth that characterize our
country most businesses, especially small and medium ones, tend to focus only
on profit ignoring all environmental costs. The lack of clear regulations and
measures taken from the government and the responsible institution is also
another reason for this degradation in our country.
costs are a separate challenge of companies and government.
are oriented toward the goal of profit and therefore the concept of
environmental costs is seen as a legal obligation imposed by the place where
the company operates and not as an attempt of the company in order to preserve
and protect the environment in which it operates.
of environmental costs and the benefits of investments in the environment, in
financial statements cannot be measured easily.
of companies and organizations remain the creation and application of measures
of environmental costs. It is something very important for us to think about
our environment on a local scale as well as a global one.
It is important to think about the
environment on a local scale as well as a global one. Our local
environment is interconnected with all other local environments, which are
connected to national environments, which are connected to a worldwide
environment. This is your opportunity to think on your own
about each topic and how they might change the world. Albania needs
stronger measures against companies that damage the environment.