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What is Environmental Management Accounting?
To make the best decisions and to take the right measures, executives rely on relevant and accurate information. Management accounting is one of the most important tools to identify, measure, accumulate, analyze, interpret and communicate relevant management information.
Environmental issues increasingly influence the economic performance of companies and organizations. Growth in environmental regulations, the demand for information by investors and requirements of business and private customers for environmentally benign products provide several important examples. Managers thus need to incorporate environmental considerations into their regular decision-making activities and processes. The financial impact of environmentally related decisions is often underestimated or not even considered at all. One main reason for this is the lack of adequate information. Through conventional accounting processes environmental costs are often hidden as part of overhead costs and are not, or are at best only inaccurately, related to products, processes and activities.
Environmental Management Accounting (EMA) addresses these challenges. It provides tools and methods to help managers assess the impact of measures taken to improve both corporate financial and environmental performance. EMA systematically integrates environmental aspects of the corporation into management accounting and decision-making processes.
EMA helps internal management to collect, analyze and communicate environment-related monetary and physical information. In particular, it reveals financial benefits and cost saving potential that can be gained from addressing environmental considerations facing the business.
To make the best decisions and to take the right measures, executives rely on relevant and accurate information. Management accounting is one of the most important tools to identify, measure, accumulate, analyze, interpret and communicate relevant management information.
Environmental issues increasingly influence the economic performance of companies and organizations. Growth in environmental regulations, the demand for information by investors and requirements of business and private customers for environmentally benign products provide several important examples. Managers thus need to incorporate environmental considerations into their regular decision-making activities and processes. The financial impact of environmentally related decisions is often underestimated or not even considered at all. One main reason for this is the lack of adequate information. Through conventional accounting processes environmental costs are often hidden as part of overhead costs and are not, or are at best only inaccurately, related to products, processes and activities.
Environmental Management Accounting (EMA) addresses these challenges. It provides tools and methods to help managers assess the impact of measures taken to improve both corporate financial and environmental performance. EMA systematically integrates environmental aspects of the corporation into management accounting and decision-making processes.
EMA helps internal management to collect, analyze and communicate environment-related monetary and physical information. In particular, it reveals financial benefits and cost saving potential that can be gained from addressing environmental considerations facing the business.
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