Environmental Management Accounting Procedures and Principles

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Environmental Management Accounting Procedures and Principles • Understandability Indicators must be clear and correspond to the user’s information needs. If indicators become too complex, for example aggregating several items by complex mathematical calculations, people lose understanding of their meaning and how the indicator may be influenced. People in charge of activities with environmental impact must understand how an indicator can be influenced. • Target orientation The indicators should correspond to environmental improvement targets. • Consistency Comparable and reliable EPIs throughout a company can only be achieved by standardization of relevant environmental and financial variables. The same method must be used to calculate EPIs across a company, defining in detail the database and calculation procedure for each variable. In addition, the method for calculating EPIs should be consistent with the financial information system and indicators. • Comparability Indicators must allow comparison over time and with other units. Thus, the calculation principles, data sources and definitions for each nominator and denominator must be defined to make sure that the database is consistent across reporting units and time series. For comparison, establishing the same data collection principles in every period, referring to comparable intervals and measuring comparable units is essential. • Balanced view An indicator system should measure changes in environmental impact and cover all important aspects of environmental impact. For all major categories of the material flow balance indicators should be defined. A common trap is to use only data available and base the indicator system on, for example, 20 indicators for waste, as this is monitored, but neglecting air and water emissions and material input, because data are not available. • Continuity Indicators become more meaningful if they are monitored by the same method over long periods. The time intervals for assessment (daily, weekly, monthly, yearly) should allow timely intervention in case of undesired developments (like breakdown of automatic sensors for water and material supply) and prevent outdated information. If indicators are calculated too infrequently or at too long intervals, there is little relation to current performance. -92-
Environmental Management Accounting Procedures and Principles 7.3. Generic indicator system As a general outline for generic indicators that can be applied throughout all sectors, the following items should be monitored. Sector specific, more detailed indicators may be valuable, but aggregation to general categories should be possible. The indicator system should cover all major input and output categories. Absolute quantity Relative quantity Eco-intensity Production output (PO) Kg, Liter Raw material input Kg Kg/PO Auxiliary material Kg Kg(PO Packaging Kg Kg/PO Operating material Kg Kg/PO Energy KWh KWh/PO Water M 3 /liter M 3 /PO Waste Kg Kg/PO Wastewater M 3 /liter M 3 /PO Specific pollution loads Kg Kg/PO Air emissions M 3 M 3 /PO Air emissions load Kg Kg/PO Other denominators Number of employees Number Turnover Money value EBIT Money value Production hours Time Workdays Days Building area M 2 Management performance indicators Number of achieved objectives and targets Number of non compliances or degree of compliance with regulation Number of sites with certified environmental management systems (EMS) Number of sites with environmental reports Percentage turnover from EMS certified sites Percentage turnover of green products (e.g., organically grown versus conventional crops) FigureSEQARABISCH 40. Environmental performance indicator system -93-
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