Analysis On The Environmental Cost Control Of Baosteel Based On Value Chain

With the rapid development of economy,the issue on the environment and resources is linked closely with survival and development of the enterprise which can not be ignored.Under the strict environmental regulations,the enterprise faces increasing environmental risks and bares more and more costs.The traditional way of environmental cost control based on end treatment only pays attention to the post process but ignore the whole process,which may cause the enterprise to lose control of the environmental cost.It is not conducive to the sustainable development of the enterprise.Value chain management not only concerns about the value-added activities in the internal value chain,but also extends longitudinally to the industry and transversely to competitors.Value chain management provides new perspective for environmental cost control,avoiding limitation and singleness,which combines environmental cost control to company strategy,so as to achieve sustainable development.Therefore,the paper applies value chain analysis method to environmental cost control,combined with the induction and deductive method.Based on introduction about the domestic and foreign literature on environmental cost control,value chain cost management,environmental cost control based on value chain,further analysis is applied,combined with case study of Baosteel company,which has some significance in theory and practice.Firstly,the paper summaries and analyses the literature on the environmental cost control,value chain cost management and environmental cost control based on value chain,and expounds the relevant theory.The analysis of environmental cost control strategy from the whole process of value increment breaks through the limitations of the traditional "end governance" environmental cost control model and extends the research perspective to the external value chain,which provides a diversified perspective for environmental cost control of the enterprise.Then,the author finds that the value chain has been applied to the environmental cost control of the Baosteel Corporation by consulting the enterprise’s Sustainable Development Report and Social Responsibility Report of recent years.Therefore,the main part of the paper concerns on the case study of Baosteel Corporation’s environmental cost control strategies.Baosteel applies innovative initiatives to the environmental cost control,such as establishing environmental cost management center,promoting the construction of green industry chain,and applying the value chain theory to environmental cost control.Baosteel has implemented the strategy of ecological design,green procurement,clean production and green marketing,which effectively reduces the environmental cost of the internal value chain.As a famous steel company,Baosteel concerns about the environmental cost strategy of the competitors instead of acting blindly.Baosteel has learnt the advanced strategies in order to improve its own cost control method.Through the implementation of environmental cost control based on value chain,Baosteel not only improves the level of comprehensive utilization of resources,reduces the unit energy consumption,but also reduces the amount of sewage and sewage charges significantly.Baosteel not only bares less environmental penalties than other companies in the industry,but also receives the government environmental incentives,getting win-win of economic effect and environmental effect.Baosteel’s experience in environmental cost control based on value chain provides important reference for other enterprises,inspiriting the enterprises to control the environmental cost from the whole process of value-added activities,strengthen cooperation with suppliers and clients on environmental management,learn advanced environmental cost control strategies from rivals modestly and effectively control the environmental cost from the source reduction,process control and end treatment.The use of value chain management will help enterprises to eliminate the environmental cost of non-value-added parts of the value chain and reduce the harm to the environment in order to realize the win-win of the economic and environmental benefits of the enterprise.