Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
There can be significant time lags between material purchasing, material use in production,
the finished product being put in stock and final delivery to and invoicing of the customer. As
production patterns change, emissions may occur much later than material inputs or product
output. These time distortions can be limited once the material flow balance relates material
input to production (consumption and not purchase) to relating product output of production
(and not product turnover).
Changes in stock as well as in material input and product output can be significant. There are
major losses of materials and products in stock, which should be accounted for by separately
adding them to the material flow balance.
Compani es wi eld a very powerf ul cont r ol li ng tool by cons tant l y refi ning the mat eri al f low bal ance
at the cor por at e lev el , whi ch should be done on a monthl y bas is together wi th the fi nanci al
acc ount i ng data.
5.5. Consistency and consolidation
The information gathered from environmental management accounting on the corporate level
can and should be divided into accounting by divisions, sites, cost centres and products. As
product managers, cost centres, sites, divisions and top managers will probably collect and be
interested in information with different system boundaries, aggregation issues have to be dealt
with.
EMA covers the preparation and provision of environmental cost and performance information
for the use of multiple internal and external stakeholder groups. This information can be
aggregated for different decision levels in the company and is often presented in a separate
environmental report for external stakeholders. A well structured and consistent underlying
information system is crucial for the quality and credibility of the data presented.
Over the last decade, significant progress has been made in identifying the core environmental
issues to be reported on and the appropriate performance indicators through which
performance can be both computed and communicated. At the same time, however, little
progress has been made in establishing the conceptual foundations necessary to provide the
secure foundation that any form of internal or public reporting requires and that is a
prerequisite for comparison and benchmarking.
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