227
© The Author(s) 2015
G. Sonnemann, M. Margni (eds.), Life Cycle Management,
LCA Compendium – The Complete World of Life Cycle Assessment,
DOI 10.1007/978-94-017-7221-1_16
Chapter 16
Taking Life Cycle Management Mainstream:
Integration in Corporate Finance
and Accounting
Cornelis Theunis Van Der Lugt
Abstract What does it take for life cycle management (LCM) to capture the
attention of the fi nancial community? LCM experts face a window of opportunity as
technological progress and economic developments lead to greater interest in mainstreaming the sustainability agenda and integrating it in business decision-making.
This includes new approaches to the assessment of impacts on Natural Capital,
environmental management as well as annual corporate reporting. Having highlighted these, this chapter employs a Green Business Case Model to defi ne ways in
which life cycle applications can be employed to link with core fi nancial indicators
of special interest to investors. It describes three hypotheses to illustrate where
LCM tools can best make a difference, positively affecting core fi nancial value drivers. The author suggests three hypothetical pathways to capture the attention of
investors, linking environmental life cycle costing (LCC) and fi nancial, activitybased costing. These are complemented with company case examples. It draws lessons from past work on the business case as well research on environmental versus
fi nancial life cycle costing (LCC).
Keywords Accounting • Corporate fi nance • Life cycle assessment • Life cycle
costing • Life cycle management • Life cycle thinking • Sustainability
1 Evolution in Assessment, Management
and Reporting Standards
Technological progress and improved understanding of the impact of a growing
world population on resource use globally has set the scene for a gradual transformation of environmental assessment, management and reporting tools over
C. T. Van Der Lugt (*)
Center for Corporate Governance in Africa , Stellenbosch University Business School ,
Cape Town , South Africa
e-mail: cornis.lugt@usb.ac.za
© The Author(s) 2015
G. Sonnemann, M. Margni (eds.), Life Cycle Management,
LCA Compendium – The Complete World of Life Cycle Assessment,
DOI 10.1007/978-94-017-7221-1_16
Chapter 16
Taking Life Cycle Management Mainstream:
Integration in Corporate Finance
and Accounting
Cornelis Theunis Van Der Lugt
Abstract What does it take for life cycle management (LCM) to capture the
attention of the fi nancial community? LCM experts face a window of opportunity as
technological progress and economic developments lead to greater interest in mainstreaming the sustainability agenda and integrating it in business decision-making.
This includes new approaches to the assessment of impacts on Natural Capital,
environmental management as well as annual corporate reporting. Having highlighted these, this chapter employs a Green Business Case Model to defi ne ways in
which life cycle applications can be employed to link with core fi nancial indicators
of special interest to investors. It describes three hypotheses to illustrate where
LCM tools can best make a difference, positively affecting core fi nancial value drivers. The author suggests three hypothetical pathways to capture the attention of
investors, linking environmental life cycle costing (LCC) and fi nancial, activitybased costing. These are complemented with company case examples. It draws lessons from past work on the business case as well research on environmental versus
fi nancial life cycle costing (LCC).
Keywords Accounting • Corporate fi nance • Life cycle assessment • Life cycle
costing • Life cycle management • Life cycle thinking • Sustainability
1 Evolution in Assessment, Management
and Reporting Standards
Technological progress and improved understanding of the impact of a growing
world population on resource use globally has set the scene for a gradual transformation of environmental assessment, management and reporting tools over
C. T. Van Der Lugt (*)
Center for Corporate Governance in Africa , Stellenbosch University Business School ,
Cape Town , South Africa
e-mail: cornis.lugt@usb.ac.za