Reference no: EM13950152
Avade Company, a manufacturer of cellular phones, has provided the following environmental information in its Corporate Social Responsibility Report (CSR) for 2006 and 2007; the data for 2008 comes from the preliminary draft of the 2008 CSR. In 2006, Avade committed itself to a continuous environmental improvement program, which was implemented throughout the company.
| Environmental Activity |
2006 |
2007 |
2008 |
|
Disposing of hazardous waste
|
$1,600,000
|
$1,200,000
|
$ 400,000
|
|
Measuring contaminant releases
|
80,000
|
800,000
|
560,000
|
|
Releasing air contaminants
|
4,000,000
|
3,200,000
|
2,000,000
|
|
Producing scrap (nonhazardous)
|
1,400,000
|
1,200,000
|
1,000,000
|
|
Operating pollution equipment
|
2,080,000
|
1,680,000
|
1,040,000
|
|
Designing processes and products
|
400,000
|
2,400,000
|
800,000
|
|
Using energy
|
1,440,000
|
1,296,000
|
1,152,000
|
|
Training employees (environmental)
|
80,000
|
160,000
|
320,000
|
|
Remediation (cleanup)
|
3,200,000
|
2,400,000
|
1,520,000
|
|
Inspecting processes
|
0
|
800,000
|
640,000
|
At the beginning of 2008, Avade began a new program of recycling nonhazardous scrap. The effort produced recycling income totaling $200,000. The marketing vice president and the environmental manager estimated that annual sales revenue had increased $1,600,000 since 2006 because of an improved public image relative to environmental performance. The company's Finance Department also estimated that Avade saved $640,000 in 2008 because of reduced finance and insurance costs, all attributable to improved environmental performance. All reductions in environmental costs from 2006 to 2008 are attributable to improvement efforts. Furthermore, any reductions represent ongoing savings.
Required
1. Avade has decided to prepare an environmental financial statement for 2008 for the products division. This report will be placed in the 2008 CSR. In the Cost section, classify environmental costs by category (prevention, detection, etc.). In the Benefits section, classify benefits into three categories: income, current savings, and ongoing savings.
2. Evaluate the changes in environmental performance.
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