Opportunity Cost Based Analysis of Corporate Eco-Efficiency: A Methodology and its Application to the CO2-Efficiency of German Companies
Posted: 10 Aug 2013 Last revised: 31 Mar 2014
Date Written: 2010
In this paper, we propose the return-to-cost-ratio (RCR) as an alternative approach to the analysis of operational eco-efficiency of companies based on the notion of opportunity costs. RCR helps to overcome two fundamental deficits of existing approaches to eco-efficiency. (1) It translates eco-efficiency into managerial terms by applying the well-established notion of opportunity costs to eco-efficiency analysis. (2) RCR allows to identify and quantify the drivers behind changes in corporate eco-efficiency. RCR is applied to the analysis of the CO2-efficiency of German companies in order to illustrate its usefulness for a detailed analysis of changes in corporate eco-efficiency as well as for the development of effective environmental strategies.
Keywords: Eco-efficiency, Opportunity cost, CO2-efficiency, Environmental performance assessment, Corporate environmental strategy
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