Environmental Management Accounting Procedures and Principles

Environmental Management Accounting
Procedures and Principles
for supporting environmental management systems, improving material efficiency and flow
management, detect cost saving potentials and quantify performance targets.
Environmental performance indicators supply the environmental manager as well as top
management with the required information from a great variety of environmental data. They
enable decision makers to get a quick overall view of progress and of environmental protection
problems still to be solved. On this basis, well-grounded targets for environmental
performance improvement can be identified and quantified, which is necessary for controlling
actual achievement. This link with traditional controlling systems allows monitoring of
environmental risks and performance and detection of profitable improvement opportunities.
The strength of environmental performance indicators (EPIs) is that they quantify
developments in environmental protection and allow for benchmarking over time. With regular
establishment and adjustment of objectives, environmental performance indicators assist in
detecting in advance and in time negative trends in environmental control – serving as an early
warning system. The comparison of environmental performance indicators within one
company or externally with other companies or competitors, so-called benchmarking, offers
the chance to detect weak points and identify potentials of improvement.
7.1. Definitions of ISO 14031 – standard on environmental performance evaluation
Environmental performance indicators may be divided into three categories. Depending on
whether they aim at assessing environmental aspects of company activities by input/output
material flow balances, activities of environmental management or the condition of the
environment outside the company, operational performance indicators, management
performance indicators and environmental condition indicators are distinguished. This system
is based on ISO TC 207 SC4 “Environmental Performance Evaluation” and the standard ISO
14031, which provides a helpful tool for setting up an indicator system.
Environmental performance indicators, EPIs are defined as follows in ISO 14031:
“OPI, Operational performance indicator, that provides information about the
environmental performance of an organization’s operations.”
Operational performance indicators are recommended for every company and form the
basis of evaluation of environmental aspects. Examples are material, energy and water
consumption, waste and emissions in total amounts and in relation to production volumes.
OPIs are an important basis for internal and external communication of environmental data,
e.g., in environmental statements in accordance with the EU EMAS Regulation or in
publications to inform employees.
“MPI, Management performance indicator, that provides information about the
management’s efforts to influence an organization’s environmental performance.”
Management performance indicators indirectly measure the environmental protection efforts
taken by a company and the results achieved with regard to influencing its environmental
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