Material Flow Cost Accounting as a Useful Innovation

Abstract

Improvement in environmental performance is the need of the hour for businesses worldwide. However, it is generally accepted by businesses that environmental and economic performance is negatively correlated and mutually exclusive and therefore it is not economically viable to practically implement any such measures that can improve the ecological performance. Material Flow Cost Accounting (MFCA) is a novel environmental management tool that can increase not only profitability but also environmental performance. This paper aims to evaluate the features of Material Flow Cost Accounting (MFCA) as an innovation as well as the factors that can facilitate its adoption in practice using five different innovation adoption frameworks. In addition to that the barriers that hamper its practical adoption by majority of businesses worldwide are also briefly discussed throughout the paper as it is surprising that only few of the global businesses introduced this simple and acceptable environmental management tool practically.