Sustainability Cost Categories and Balanced Scorecard Insights

AYB202 TUTORIAL 11: QUESTIONS QUESTION 1 For each of the following Sustainability Costs indicate which category (level) they fall under: 1. Contingent costs 2. Conventional costs 3. Image and relationship costs 4. Potentially hidden costs 5. Societal costs Cost Category Sustainability Cost Contingent costs Clean-up costs from a chemical accident Image and relationship costs Community relations program Potentially hidden costs Costs associated with prolonged licensing permits Potentially hidden costs Costs associated with stricter monitoring Potentially hidden costs Decommissioning of site Conventional/ Contingent Disposal of waste Image and relationship Environmental labelling Potentially hidden costs Feasibility studies Potentially hidden costs Future compliance costs Conventional Goodwill/impairment related costs Societal costs Habitat and wetland protection Societal costs Landscaping around site Conventional costs New capital equipment costs Contingent costs Personal injury Conventional costs Petroleum Conventional costs Raw materials Potentially hidden costs Remediation costs Potentially hidden costs Site studies Conventional costs Staff training Contingent costs Sustainability legal expenses Image and relationship costs Sustainability reports

AYB202 TUTORIAL 11: QUESTIONS QUESTION 2 Search the internet to find examples of Australian companies disclosing their sustainability practices using management accounting information or tools such as the balanced scorecard. - What information does it provide? - How would you rate their EES performance?

AYB202 TUTORIAL 11: QUESTIONS QUESTION 3 In class activity / Case Study Brewster House is a not-for-profit shelter for the homeless. Lately funding has decreased, but the demand for overnight shelter has increased. In cold weather, clients are turned away because the shelter is full. The director believes that the current capacity could be used more efficiently. No one has taken time to analyse the physical layout of the shelter and current use of space. Several rooms are used for storage that could probably be used for temporary housing. The stored boxes need to be sorted and moved. Volunteers currently assign beds and manage overnight housing because the director is busy with fundraising. Volunteers work just a few shifts each week, so no one has taken responsibility for coordinating improvements in the services offered. The director is considering whether to implement a balanced scorecard to focus the attention of all volunteers on areas that need improvement. Brewster receives funds from several sources, including a set annual budget from the local council and direct donations from supporters. The director develops a budget each year based on expected funding, but she cannot precisely predict donations. The budget is used primarily to justify funding requests submitted to the council. The director has asked you to evaluate operations and recommend whether the entity should develop a balanced scorecard. She cannot give bonuses based on the measures, but she wonders whether developing and monitoring performance measures would encourage the volunteers to increase the use of capacity. She also wonders whether some information from the balanced scorecard could be used to show donors the effectiveness of the operations in achieving social goals. Required (a) Describe how a balanced scorecard could be used to incorporate the social sustainability goals of Brewster house. (b) Design a balanced scorecard for Brewster House that includes sustainability-related measures for each scorecard perspective. (c) What issues would Brewster House management have to overcome to ensure a change in practice? (d) How might adopting a sustainability balanced scorecard contribute to Brewster’s overall profit? (e)

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AYB202 TUTORIAL 11: QUESTIONS Additional questions: In your own time, complete the following questions from the text: Eldenburg et al., 4 th edition Chapter 21 21.1, 21.4, 21.5, 21.7, 21.10

L11 Tutorial Questions

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