Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
first balance sheet, available data from material accounting and the major elements on the list
of balances will determine the scope.
Some accounts would require a disproportionate amount of time to determine quantities, so at
least an estimate of the purchasing price in order to create a comparison base for subsequent
years should be recorded.
The greatest potential for improvement is generally in the area of operating materials. Only
very few companies record oils, lubricants, chemicals, paints, varnishes, diluting agents, glues,
cleaning agents and other operating materials via material numbers and warehouse
inventories. In most cases, there are no separate accounts for operating materials and they
are not accounted for in production lists or production planning systems.
Cost centres assignment can also be improved in many ways. Frequently, operating materials
disappear into overhead and cannot be traced in detail. It is therefore advisable to record and
classify, to the extent possible, through material numbers or separate accounts, at least those
operating materials related to hazardous waste disposal or other waste flows. Large quantities
of many of these substances “disappear” into accounts like “other operating materials”. It is
very difficult to trace them by quantity later.
Repair materials and spare parts, as well as maintenance, are often recorded under entirely
different categories. Since the repair and maintenance shop as well as the laboratory are
particularly critical parts of the company with regards to environmentally relevant substances
and the production of hazardous waste, it would be desirable to ensure that the materials used
are disposed of in an appropriate manner and that, without exception, they are recorded in the
inventory. This materials use can be kept on file through the special cost centres for shop and
lab.
A similar approach applies to cleaning agents, which not all firms record in separate accounts.
Ecological relevance and quantities will determine the degree of detail of those records.
With regard to administrative materials and food services, purchasing values should be used
for monitoring, since the composition and amounts of waste are determined by factors
independent of production. Detailed quantity determination is not a priority. However, as a
result of these factors, types of emission independent of production (such as organic waste,
toner cartridges) add to waste production.
5.3.5. Merchandise
Many companies buy products for trade without further processing, called merchandise. Often,
product parts produced externally are just added to the final product without processing. The
distinction to raw and auxiliary materials is whether incorporation into the product without
significant process engineering and changes affecting emissions is possible. For a consistent
analysis of material flows by weight, information on weight is needed, unless merchandise can
be separated as well from product output, so that the material flow balance can be limited to
the company’s own production.
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