Environmental Profit & Loss accounts (E P&L)

We provide Environmental Profit & Loss accounts (E P&L) and Natural Capital Accounts (NCA) that cover the life cycle impacts for the entire product portfolio for a company or an industry.


Product portfolio assessments

An Environmental Profit & Loss account (E P&L) complements the normal Product & Loss account of a company with an account of the monetarised external benefits and costs related to the life cycle of the product portfolio of the company. It can be described as an environmental life cycle assessment of all the products in the product portfolio with monetary valuation of the impacts. Except for the monetary valuation of the impacts, an E P&L is thus equivalent to what the European Commission calls an Organisation Environmental Footprint (OEF).

An E P&L thus goes beyond the product gates, beyond the individual products, and beyond the typical multi-indicator approaches to the full life cycle, to the full product portfolio and to full monetary valuation of the environmental impacts. The first acknowledged corporate E P&L was published by PUMA with their: “PUMA’s Environmental Profit and Loss Account for the year ended 31 December 2010”. In cooperation with Trucost and NIRAS we were among the first consultancies to provide E P&Ls with the above-mentioned projects. Our particular strength is that we can provide detailed environmental inventories that are fully mass, energy and water balanced, which is a good measure of their completeness and consistency, and essential if the results are to be used for practical decision-making. In our project for Arla Foods we used our own method for monetary valuation, Stepwise2006.

Natural Capital Accounting (NCA) is sometimes used as a synonym for E P&L, but can also be defined more narrowly as that part of an EP&L that is concerned with natural capital impacts, dependencies and assets. Natural capital covers all abiotic natural resources (minerals, soils, air, water) as well as biodiversity and other ecosystem resources that provide us with ‘ecosystem services’. Natural capital is thus an extension of the economic notion of manufactured capital (products which enable the production of more products) and NCA provides a monetary valuation of the impacts on these capital assets.

An E P&L will capture the magnitude of the environmental externalities and where in the supply chain they occur. Therefore an NCA or E P&L can be used by stakeholders to make informed environmental choices as well as by businesses for hotspot identification.