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Environmental Shareholder Value

Contents

1 Foreword

2 Introduction to the report

3 Reading guide

4 Introduction to the company's environment

• 4.1 The company's environmental impact
• 4.2 The company's environmental regulation
• 4.3 The company's environmental work

5 Introduction to Corporate Governance

• 5.1 The Environment and Corporate Governance

6 Introduction to Shareholder Value

• 6.1 Calculation of Shareholder Value
• 6.2 Economic Profit (EP)
• 6.3 ROCE
• 6.4 Profit margin before depreciation - EBITDA%
• 6.5 Relationship between the environment and Shareholder Value

7 Fixed capital investments

• 7.1 Environmental investments
• 7.2 Investments in cleaner technology in connection with CO₂ emission allowance trading
• 7.3 Summary

8 Working capital investments

• 8.1 Environmental Management Accounting
• 8.2 Environmental working capital investments
• 8.3 Summary

9 Earnings: sales growth and operating profit margin

• 9.1 Competition in the sector
• 9.2 Threats from new competitors
• 9.3 The bargaining power of the customers
• 9.4 The bargaining power of the suppliers
• 9.5 The threats from substitute products
• 9.6 Summary

10 Cost of capital

• 10.1 Environment risks
• 10.2 Management of environmental risks
• 10.3 Access to special funds

11 Value Growth Duration

• 11.1 Environmental risks and opportunities

12 Keeping a check on Environmental Shareholder Value

13 Calculation example for the interplay between the environment and Shareholder Value

• 13.1 Investment in cleaner technology and the effect on EP
• 13.2 Resource efficiency and the effect on ROCE
• 13.3 Product liability (take-back obligation) and the effect on EBITDA

14 Setting the three elements in motion

15 Explanation of terminology

Appendix A

Literature

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Version 1.0 April 2005, © Danish Environmental Protection Agency