Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
a consistency check provides great optimization potentials, and has thus become a major tool
in environmental accounting. Therefore it is desirable for the technical and financial
bookkeeping to be conducted in a compatible way.
Emissions
Input
Product
Waste
Wastewater
Figure 30.
Process flow charts: opening the black box
Splitting up the corporate flows into cost centres, or even down to specific production
equipment allows for more detailed investigation of technical improvement options, but also for
tracing the sources of costs. Special attention should be drawn to the quantitative recording of
materials on a consistent kilogram basis. The key questions are:
• Which cost centres have processed how much of the materials?
• Can material input be further divided into production lines or specific equipment?
• How large were the resulting emissions, scrap and waste, preferably recorded separately
for each cost centre, production line and machinery?
The process level is the main focus for pollution prevention projects. Data on the process level
is also necessary for further analysis by products. It is crucial that the system boundaries for
financial calculation by cost centres and for technical monitoring can be related to each other.
To ensure consistency between data from cost centres and process flow charts, the methods
of activity based costing and of flow cost accounting have been developed.
6.3. Activity-based costing
This section discusses activity-based costing of pollution prevention. The focus of this
approach deals with correct allocation of costs to products, by reducing the amount of costs
hidden in overhead cost categories. Applying this approach can improve economic
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