Technology: Environmental Management Accounting
Initiative (EMA)
Background
Management accounting is a broad term referring to the process of
identification, measurement, accumulation, analysis, preparation,
interpretation, and communication of financial information used by
management for planning, evaluation, and control within an organization,
and for ensuring of accountability for its resources.
Environmental management accounting serves as a mechanism to identify
and measure the full spectrum of environmental costs of current
production processes and the economic benefits of pollution prevention
or cleaner processes, and to integrate these costs and benefits into
day-to-day business decision-making.
While management accounting systems are traditionally viewed as matters
internal to a firm, the potential social benefits resulting from
widespread use of environmental management tools calls for active
governmental involvement in promoting such systems. Government
programmes and policies can play an important role in encouraging and
motivating businesses to adopt environmental management accounting
systems as an integral part of a firm's management accounting practices,
such that all project costs (including social and environmental costs)
become clearly articulated, fully inventoried and properly allocated
over the life of an investment.
How a government chooses to approach such an intervention determines the
success in the dissemination of these systems and the willing
participation of industry in this process, thus warranting the
discussion and study that this initiative will undertake. This
initiative will examine the design and implementation of incentives to
promote the adoption of environmental managerial accounting, based on
work undertaken in a number of countries.
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