Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
The Kyoto Protocol 8 covers industrial and energy linked global warming gas emissions. The
main substances are Carbon Dioxide, Methane, Nitrous Oxides, Sulfur Hexafluoride,
Perfluorcarbons and Hydrofluorcarbons, resulting from fuel combustion, process reactions and
treatment processes. All greenhouse gas emissions should be calculated in metric tons of
CO2 equivalent. Conversion factors for the global warming potential based on CO2 can be
found in the annex.
CFC emissions contribute to the depletion of the ozone layer. The Montreal Protocol covers
ozone-depleting substances and standardizes their ozone depletion potential (ODP) in relation
to the reference substance CFC-11. Once the volumes purchased have been assessed,
these conversion factors (see annex) should be applied to calculate ozone-depleting
emissions in metric tons of CFC-11 equivalents.
Even if a certain substance is not emitted, it should be recorded in the input/output balance as
n.r. (not relevant). This will indicate to the internal or external reader that certain substances
were not omitted from consideration, but were not used.
5.4. Organization of stock management and production planning
Input/Output items are partly derived from the profit and loss accounts. Only this list is a
complete record of all materials purchased (in value terms). To the extent that a company
works with material classification numbers, the amounts purchased can be derived relatively
easily from the storage system.
Checking stock accounts and flow accounts for consistency is crucial for the material balance.
It should be possible at least with regard to raw and auxiliary materials and product packaging
that in any given year the balance sheet can be derived in value and volume from the balance
sheet of the previous year plus the flow of accounts of that year.
Systems of increasing complexity can be used for storage administration, depending on the
size of the company and the value of the product warehouse. Examples ranked by complexity
of the information system are:
1. Material purchase value is recorded as expenditure directly during procurement; a further
tracking of quantities used is not possible. This system is common in small and mediumsized
enterprises and with operating materials.
2. Material stock numbers are used to record material quantities as well, but this system does
not record materials on stock. The system enables determination of annual quantities
purchased but not the place and time of consumption in the company.
3. Material is taken from the warehouse by means of a stock issuing form. Here product use
can be determined exactly by value and quantity.
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The text of the Protocol to the UNFCCC was adopted at the United Nations Framework Convention
on Climate Change (UNFCCC) in Kyoto, Japan in December 1997.
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