Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
Absolute versus relative
From an ecological point of view, the absolute indicators are the most important ones because
they measure the total consumption of resources and emissions of pollutants (e.g., the
consumption of auxiliary material in kilogram or the quantity of wastewater in m 3 ). For
comparison with previous years, a relation to previous production volumes or other significant
reference figures is necessary. While absolute indicators describe the total environmental
burden, relative indicators allow monitoring of efficiency improvements. Absolute and relative
indicators are two sides of a coin and both are useful. The implications of relative indicators
cannot be judged without the absolute database and vice versa.
In order to compare company units or companies, it is important to look at absolute indicators
in relation to relevant reference units (e.g., annual production quantity, number of employees
or machine operation times).
Here are some examples:
Efficiency of auxiliary material = Input of auxiliary material in kg
Produced quantity in kg
Water consumption per staff member per day =
Water consumption in liters
Number of employees x work days
Relative indicators represent the environmental performance of a company in relation to its
size, to the production output or to the number of employees. From an ecological point of view
the absolute figures of the material flow balance are more important. From the point of view of
monitoring and benchmarking the relative figures have priority. Absolute indicators show the
extent of environmental impact; relative indicators depict whether or not environmental
measures were successful.
System boundaries
Indicators may be derived from data for the company, specific sites, departments and further
down to cost centres and production processes. Each decision maker requires information for
the system boundaries of his or her scope of responsibility. Thus, caution must be given to
aggregation without double counting. Data on different system boundaries serves different
purposes. Daily, weekly or monthly monitoring of process emissions works as an early warning
system against spills and leakages and as an information source for improvement potentials,
while data on the company and corporate level are more important for target setting and
environmental reporting.
Environmental performance indicators may thus refer to different system boundaries, from
data for the entire corporation, on different plants or sites, to individual processes or
departments. The most common are: corporate indicators, site indicators, and process
indicators.
Indicators derived from the lower organizational level (departments, processes, cost centres)
may be suitable primarily as a monitoring instrument for the respective departments.
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