Environmental Project, 1069 – Perspectives in the Development and Application of Environmental Management Accounting

Perspectives in the Development and Application of Environmental Management Accounting

1 Introduction

This report gathers together a number of perspectives on the development and application of Environmental Management Accounting (EMA).

The objective of the report is to supplement the EMA Guide on the Danish EPA website (www.mst.dk), which provides an introduction to working with EMA. Therefore, readers without prior knowledge of EMA are recommended to read the EMA Guide before reading this report.

The report is also a supplement to Danish experience gathered from the pilot project supported by the Danish EPA Cleaner Products Programme in nine Danish enterprises (Melchiorsen & Mogensen, 2004).

Three overall perspectives have been chosen, and these comprise the three parts of the report: 1) Developments in EMA research, 2) Best-practice experience and 3) The relationship between EMA and the environment in the annual report.

All three parts of the report aim at explaining what EMA can be used for, and how EMA can be built up and exploited in very different organisations and situations. The report also provides an insight into the barriers and problems encountered in applying EMA in given situations.

The three parts of the report are described below:

Developments in EMA research
This part of the report describes the development trends within EMA research internationally. The chapter provides an overview of the main research themes within both methodology and practical application of EMA. The chapter can be perceived as a status report of the progress of international research to date within EMA, and the developments on the way.
Best Practice for EMA in an international perspective

This part of the report includes a number of examples of international experience with EMA, based on interviews with foreign enterprises who have been working with EMA for some years.

The chapter can be used as inspiration for how EMA can be applied in practice as it includes an overview of many different types of organisation which use EMA in very different ways.

The chapter also includes a description of the barriers that can be expected in implementing EMA, as well as some examples of the ultimate results of EMA work.
The relationship between EMA and the environment in the annual report

This part of the report provides an insight into the Danish Financial Statements Act, and it analyses how EMA can be applied to meet the requirements of the Financial Statements Act to make visible the interplay between environmental conditions and the results, development and financial position of the enterprise.

The chapter shows how EMA data can be included in the annual report of enterprises already working with EMA. It also shows how an EMA process can be initiated for enterprises that want to illustrate the value of their environment work in their annual report.

The three parts are independent references for readers interested in EMA, whether it be a specialist insight into developments in research, or simply inspiration from others' experience from their own work with EMA. The reader may also need more insight into the Financial Statements Act and its requirements for environmental information, or descriptions of how EMA can supplement the information in the annual report.

The report has been prepared by Birgitte Mogensen, state- authorised public accountant and Anne Søgaard Melchiorsen MSc from PricewaterhouseCoopers, and Pall Rikhardsson Ph.D., associate professor at the Aarhus School of Business.