Environmental costs are 29.33 percent of total operating costs, seemingly a significant amount. Reducing environmental costs by improving environmental performance can significantly increase a firm's profitability
2. See Exhibit 14.11. Of the total environmental costs, only 21 percent are from the prevention and detection categories, and 79 percent of the environmental costs are failure costs. Thus, increasing prevention activities should drive down the costs of failure activities in a way that is cost beneficial
3. The most likely reason is that the cost is a social cost and not paid for by the company and thus not of direct interest to Verde. In fact, such formal recognition may create a potential liability for the company (Could this be an ethical issue.)