1. Research background

Sustainability is one of the greatest challenges for manufacturing organisations in the twenty-first century. On the one hand, businesses have a responsibility to shareholders who expect financial returns. On the other hand, increased stakeholder pressure, legislation, regulations and taxes have forced companies to include environmental and social values in their operations. This has led to an increase in the number of companies pursuing the concept of a sustainable business model (SBM) that aims to balance long-term profitability and productivity against environmental and social impacts.

The SBM is still an under-developed concept and currently, no consensus in terms of its ultimate shape exists. Hence, analogically to lean and total quality management systems, the SBM is a continuous transformation and improvement process. This process should be managed by developing an appropriate measurement system which is an indispensable element of any process of change.

The full cost accounting (FCA) concept (classified under the umbrella of sustainability accounting tools) is a potentially attractive option for businesses to form such a system. It has the ability to capture more than just financial impacts (values) and to measure both internal and external environmental (social) impacts in addition to financial ones. It translates a range of conflicting sustainability information into a monetary unit score which is an effective way of communicating trade-offs, win-wins and outcomes for complex and multi-disciplinary sustainability decisions.

2. Research objectives

FCA has been applied in many industrial settings that include the oil and gas, energy, chemical and waste management industries. Presently, it is not known how it can be applied in an automotive industry context. Therefore, the aim of this study is to explore the applicability of FCA in the automotive sector in order to develop models for a more holistic and comprehensive sustainability assessment of automobiles. This research project consists of the following main objectives:

• Identify FCA methods that have been developed to date and select appropriate method for the automotive setting
• Adapt the FCA method to the automotive setting by developing a comprehensive set of assessment criteria for automotive sustainability assessment
• Develop an algorithm for valuing environmental and social risks and impacts
• Test the automotive FCA model based on the input data obtained from the sponsoring company

3. Progress

• A comprehensive literature review of 4381 papers extracted ten important FCA methods. Based on a careful examination and critical analysis of each approach and existing automotive sustainability measures, the Sustainability Assessment Model (SAM) developed by British Petroleum and Aberdeen University has been proposed as a well-developed and potentially practical tool for application in an automotive setting. The SAM measures of a broad range of economic, environmental, resource and social effects (both internal and external), which is currently lacking within the automotive industry. Its other strengths are the ability to provide monetary metrics together with physical metrics for sustainability assessment, its flexibility and the ability to combine multiple sustainability dimensions (see Jasinski et al., 2015 for study results)
  
• A comprehensive framework for the automotive SAM was developed by selecting a set of assessment criteria from the literature and refining these through an interview study with 24 experts in the automotive sector. The developed framework consists of 26 midpoint impact categories and 9 potential end-point effects of the selected criteria (see Jasinski et al., 2016).

• Methodology to value environmental and social risks and impacts is a work in progress. The primary focus is the valuation of resource depletion impacts.