The role of strategic management of environmental cost in improving the financial performance of industrial companies - An Empirical Study

The purpose of this paper is to investigate the role of strategic management of environmental costs in improving the financial performance of industrial companies by determining the importance of environmental costs, regarding their special nature that makes them included in the general costs of companies. Therefore, companies should be directed to accurately define and measure this type of cost strategically and effectively. Which is ultimately reflected on the financial performance of these companies. To achieve this objective, the researcher conducted an applied study on one of the Egyptian companies which pollutes the environment and is registered in the stock exchange. The study is based on personal interviews and phone calls with several managers and employees in various departments of the company; in addition to analyzing the company financial statements by relying on some financial indicators. The researcher has used data concerning the company before and after implementation the process of environmental cost management in order to determine the impact of application on the financial performance of the company. The results indicated that the process of strategic management of environmental costs leads to reducing the costs of products and operation, and consequently the cost of the company as a whole, as well as achieving multiple competitive advantages, which have a positive impact on the companys financial performance.