Page 324 - Ebook HTKH 2024

including: environmental costs in business units, upstream and downstream
environmental costs, environmental management costs, research and development costs,

social costs, and environmental damage compensation costs.
To achieve internal management and cost control objectives, Japanese enterprises
also identify environmental costs, including material costs of waste and waste
processing costs, and classify costs according to material flows. Accordingly,
environmental costs include environmental protection costs, material costs of waste, and
waste processing costs. However, these costs are only used in internal management
reports. External environmental cost reports do not include waste-related environmental
costs and social costs. Companies can choose to voluntarily report information about

environmental costs in three ways: (1) Independent reporting of environmental costs and
environmental benefits; (2) Combined reporting of environmental costs and
environmental benefits; (3) Combined reporting of environmental costs, environmental
benefits, and economic benefits.
In a study on the application of Material Flow Cost Accounting (MFCA)
conducted by METI in 2010 across 15 manufacturing companies, 5 non-manufacturing

companies, and 3 companies in the supply chain, it was found that this method is widely
applied in Japan in small enterprises with fewer than 100 employees, such as TS
Corporation and Shinryo Co. Ltd, as well as in larger enterprises with more than 1,000
employees, such as Canon Inc. and Nitto Denko Corporation, across various industries
including manufacturing, services, construction, and logistics.
Leading corporations like Toyota and Canon have successfully implemented
environmental cost accounting models. Toyota has achieved annual benefits worth

billions of yen by reducing energy consumption, minimizing waste processing costs,
and adopting cleaner production technologies. Canon, by accounting for material flow
costs (MFCA), has reduced waste-related environmental costs and increased useful
product output. MFCA analyses initiated a series of reductions in both environmental
impacts and reclassification costs of glass waste as material losses at Canon. Previously,
glass waste was considered an unavoidable result of the production process. Based on

MFCA analysis, Canon introduced thinner glass materials in collaboration with glass
suppliers. Following these initial successes, Canon expanded the MFCA model
throughout the entire corporation.
It is evident that environmental cost accounting in Japan is primarily aimed at
external reporting, but it is becoming increasingly prevalent and is expected to grow
significantly in the future.
Outstanding features of the implementation of environmental cost accounting in
countries such as Germany, the US, and Japan compared to Vietnam:

To perform environmental cost accounting well, Germany, the US and Japan
currently all use environmental management systems according to ISO 14001 and Higg
index, using recycled organic materials: GRS, with Chemical management system:
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