Environmental Management Accounting Procedures and Principles

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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. -94-
Environmental Management Accounting Procedures and Principles Assessments should be at shorter time intervals, e.g., quarterly, monthly or weekly, in order to determine weak points and to take corrective measures in time. The main inputs of raw and auxiliary materials and energy as well as the major sources of emissions should be monitored on a process level. Site and corporate indicators serve as general performance information for management over a longer period of time and for annual reporting for the management review. Site indicators may also be used for assessing environmental impacts in environmental statements in accordance with the EU EMAS regulations. Corporate environmental reports include aggregated indicators on a corporate level. 7.4. The problem of finding a meaningful denominator Where production output (PO) from the material flow balance does not provide a meaningful indicator or is not available, or in addition to this denominator, other variables can be used. Number of employees is a reference often used especially in the service sector. The following environmental performance indicator matrix shows in what way absolute indicators in combination with meaningful reference units may be used to obtain useful relative indicators. The longitudinal axis provides examples of absolute indicators (basic data from the material flow balance), which may be related to the relevant reference units of the horizontal axis. A check mark indicates useful combinations, the choice among which will depend on the business sector. In addition to the main categories of the input-output analysis, the matrix also includes environmental management performance indicators. Depending on the production range of a company, other variables may also be useful. Production volume per site or line Cost centre Machine time Material use Energy use Employees Working days Shifts/Working hours Site area Revenue Production costs Material input √ √ √ √ √ √ Packaging √ √ √ √ √ Energy input √ √ √ √ Water input √ √ √ √ Detergents √ √ √ √ √ Waste √ √ √ √ √ Wastewater √ √ √ Emissions √ √ √ √ -95-
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