Can the efficiency of nonfinancial capital use be measured? applying the sustainable value approach to Chinese companies

This paper explores the possibilities of measuring environmental impact of companies in monetary terms through the application for the first time of a methodology designed in Europe to data provided by a Chinese company. Although the design and implementation of accurate measurement procedures to assess environmental performance has proved difficult for corporations, we show in our case study that is possible to calculate the environmental negative impact of companies in monetary terms in order to provide companies with a tool that not only helps to improve the efficiency in the use of natural resources enhancing a better environmental performance but also allows as a consequence cost savings and brand building in long terms. Our case study demonstrates that viable and useful information can be produced even in emerging economics just like in China. We use data from an airline company in Hong Kong to illustrate the importance of measuring the environmental performance of companies, and the possibilities to do so in China. With the obtained results, this paper seeks to demonstrate that integrating environmental and economic information is not only possible and relatively straightforward, but also useful for optimizing natural resource usage and, as a consequence, improving the economy as a whole.