May-2015

EMA
EMA FOR SUSTAINABLE
DEVELOPMENT IN THE
CORPORATE SECTOR: AN
OVERVIEW
There is a need to raise the awareness of accountants and directors
and other associated members of the company on the concept
of Environmental Management Accounting (EMA), its general
framework and accounting systems so as to enable them to achieve
the desired benefits of its applications
Dr Debrupa
Chakraborty
Asst. Professor, Netaji
Nagar College, Kolkata
ENVIRONMENTAL issues are increasingly
getting more space in the
performance evaluation criteria of
companies and organizations. Reason being,
the environmental performance is increasingly
demanded by the stakeholders and forcing
many companies to innovate new and cost
effective ways to manage and minimize environmental
impacts. Growing norm/regulations/stakeholders’/citizens’
demand to
maintain environmental standards is leading to
increase in direct and indirect costs. The need
of EMA in a firm or why firms should separately
account for environment or ‘go green’
has been emphasized in a number of studies
(Parker, 2000; Bennett et al. 2003; UNDSD,
2001; IFAC, 2004; Jasch, 2003; Burritt et al.,
2002), whereas the strategic competitive advantage
of this approach has been identified
by Parker (2000) and further endorsed in a
number of professional literature ( Gibson
& Martin , 2004; Jasch, 2003; Savage, 2003).
EMA has been used to benchmark environmental
costs citing experience from four
countries ( Csutora& Palma, 2008); chemical
management services ( Kurdve, 2008); in
an Australian University( Chang & Deegan,
2008); in metal finishing industry( Koefoed,
2008), to name a few.
To maintain competitive edge over other
companies the environmental impact of
products and services and their efficiency in
the management of resources and emissions
can be judged through Environmental Management
Accounting (EMA). Companies can
position their performance through environmental
impact. Environmental Management
Accounting (EMA) provides a tool and a
method to help managers assess the impact of
both corporate financial and environmental
performance. In particular, it reveals financial
benefits and cost saving potential that can be
gained from addressing environmental considerations
of business and achieve sustainable
development , all at once. In this paper we discuss
the concept of EMA in Section 2, its importance
and benefits for an organization in
Section 3. Section 4 presents a framework of
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MAY 2015 the MANAGEMENT ACCOUNTANT 77