Chemical management services:
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Transcript Chemical management services:
International Activities and Trends in
Environmental Management Accounting
(EMA)
Deborah Savage, Ph.D.
Director
EMA Research & Information Center (EMARIC)
[email protected] www.EMAwebsite.org
What is EMA?
There are many alternative definitions, but
broadly defined…
EMA is the identification, collection, analysis, and use
of two types of information for internal decisionmaking:
Physical information on the use, flows, and fates of
energy, water, and materials (including wastes)
Monetary information on environment-related costs,
earnings, and savings
EMA Expert Working Group of the
United Nations Division for Sustainable Development
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Why was EMA Developed?
EMA was conceived in recognition of some of the
limitations of conventional practices for informing
environmental management decisions
insufficient tracking of energy, materials, and
wastes
“hiding” of costs in overhead accounts and
elsewhere in the accounting records
lack of data on future and less tangible costs in the
accounting records at all
Insufficient communications between the
accounting and other departments/staff, e.g.,
production, environmental, research…
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Potential Benefits of EMA…
Compliance
EMA supports environmental
protection via cost-efficient
compliance with environmental
regulation and self-imposed
environmental policies
Examples…
Eco-Efficiency
EMA supports the simultaneous
reduction of costs and environmental
impacts via more efficient use of
energy, water and materials in internal
operations and final products
Examples…
Strategic
Position
EMA supports the evaluation and
implementation of cost-effective
and environmentally sensitive
programs for ensuring the
organization’s long-term strategic
position
Examples…
Planning and
implementing pollution
control investments
More accurately tracking
the flow of energy, water,
materials and wastes
Working with suppliers to
design products &
services for “green”
markets
Investigating and
purchasing cost-effective
substitutes for toxic
materials
Planning and
implementing energy,
water and materials
efficiency projects
Estimating the internal
costs of likely future
regulations
Reporting environmental
waste and emissions to
regulatory authorities
Assessing the total
annual return on
investment in ecoefficiency activities
Reporting to stakeholders
such as customers,
investors and local
communities
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The Globalization of EMA…
1992: US Environmental Protection Agency was
first national government agency to establish a
formal EMA program
1998: EMA Networks (EMAN) in Europe, AsiaPacific, the Americas
1999: Expert Working Group on EMA convened by
the United Nations Division for Sustainable
Development (UNDSD)
2002: International EMA Website
2004: EMA activities in over 30 countries
2005: International Guidance Document
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EMA Around the World…
THE AMERICAS
Argentina
Brazil
Canada
Colombia
Guatemala
Nicaragua
Peru
USA
These lists are not
comprehensive…
EUROPE
Austria Czech Rep. Finland Germany
Italy Netherlands Portugal Spain
Slovak Rep. Sweden UK
AFRICA
Egypt
South Africa
Tanzania
Zimbabwe
ASIA-PACIFIC
Australia
Japan
Philippines
Rep. of Korea
Singapore
Taiwan
Thailand
Vietnam
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Example from North America…
United States
EMA for Supply Chain Management
Chemical Management Services (CMS) model
EMA used to track flow of chemicals & chemical wastes
within the company, and estimate all associated costs
Information used to design and implement contracts
with suppliers of chemical management services
Model is spreading in the US
50 - 80% of the auto industry
35% of the electronics industry
20% of the metalworking industry
10% of the aerospace industry
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Example from Asia-Pacific…
Philippines
EMA for Cleaner Production (CP)
EMARIC + Philippine Institute of
CPAs (PICPA) + other partners
Training course on Cleaner Production
and “Environmental Cost Assessment”
For practicing accountants & their
non-accounting colleagues
Course popularity led to incorporation
of EMA into the academic accounting
curriculum requirements
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Example from Europe…
Germany
Materials Flow Cost Accounting
University of Augsburg and the
Institute of Management & Environment
Map materials flows and
information flows in an organization
Attach quantitative data on materials
amounts and costs
Look for information mismatches, missing materials,
opportunities to save money, etc.
Make information system improvements
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UNDSD Expert Working Group on EMA…
UNDSD = United Nations Division
for Sustainable Development
EMA Working Group established in 1999
Core members are government representatives from
30+ countries
Other members include invited representatives of
accounting associations, academia, business, etc.
Group has met 8 times, each time in a different country
Group has discussed many international topics of
debate surrounding EMA
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International Consensus (1)
What kind of information does EMA include?
Only monetary information?
Physical information also?
Growing international consensus – both
It is difficult to do good cost accounting
without doing good materials accounting first
(especially in manufacturing)
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International Consensus (2)
Which environment-related costs?
Growing international consensus – be
comprehensive
Do not leave out any potentially significant
costs, earnings, or savings – especially the
costs associated with wasted raw materials
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International Consensus (3)
How can or should EMA information be used?
Primarily for internal management?
For external reporting also?
Growing international consensus – both
EMA information can/does inform:
Internal management decision-making (e.g.,
CP, SCEM, EMS, etc.)
External reporting (e.g., financial,
environmental, sustainability, statistical)
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International Consensus (4)
What are the best EMA implementation
methodologies?
Growing international consensus – will
vary from case to case, but some best
practices can probably be identified
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EMA Guidance Document for the International
Accounting Community…
Facilitator – UNDSD Expert Working Group
Funders – UNDSD as well as governments of
US, UK, Japan, Germany, Austria
Authors – EMARIC (USA) and IOEW (Austria)
Reviewers – nominated experts, the UNDSD
group, the public…
Organizer of Public Review Process and
Publication – International Federation of
Accountants (IFAC) Board of Directors
Published Aug 24, 2005
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Why More Guidance Now?
Some of the existing guidance is
• Focused on a particular national audience (with
•
•
national case studies)
Focused on a particular end-use of EMA
information (e.g., solid waste management, P2/CP,
external reporting, supply chain management)
Outdated (because the field is evolving so quickly)
Still considerable confusion on definitions and
language
There are no international standards or guidance
endorsed by an international accounting organization
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Important to note…
An introductory guidance document, not a day-to-day
implementation manual
Primary audience is accountants, but because EMA
is so interdisciplinary, document was also written
with other audiences in mind, e.g., technical
experts, environmental managers, production
supervisors, etc.
Manufacturing focus, because the most EMA
experience to date available there, but also relevant to
other sectors (e.g., service sector, government)
Written for an international audience (with varying
practices and language)
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Chapters 1 & 2
CHAPTER 1 – INTRODUCTION & CONTEXT
Why Care about Environmental Issues?
Accounting Concepts and Language
Environmental Accounting Context, Concepts, and
Language
CHAPTER 2 – EMA DEFINITION(S), USES,
BENEFITS, AND CHALLENGES
What is EMA?
Types of Information included under EMA
Uses and Benefits of EMA
EMA Challenges - Current Accounting Practices
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Chapter 3
PHYSICAL INFORMATION: FLOW OF ENERGY,
WATER, MATERIALS, AND WASTES
Physical Information
• Materials Inputs
• Product Outputs
• Non-Product Outputs (Waste and Emissions)
Materials/Mass Balances
Physical Environmental Performance Indicators
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Chapter 4
MONETARY INFORMATION: ENVIRONMENT-RELATED
COSTS AND EARNINGS
Cost Categories
• Waste & Emission Control Costs
• Prevention & Other Environmental Management Costs
• Research & Development Costs
• Materials Costs of Non-Product Outputs
• Materials Costs of Product Outputs
• Less Tangible Costs
Monetary Environmental Performance Indicators
Environment-related Earnings and Savings
Distribution of Costs by Environmental Domain
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Chapter 5
SELECTED EXAMPLES OF EMA APPLICATIONS FOR
INTERNAL MANAGEMENT
Examples of Applications at
• The Site & Organization Level
• The Materials Level
• The Project Level
Examples from Argentina, Austria, Germany, Japan, the
Netherlands, the UK, and the USA.
Illustrate the use of EMA to support supply chain
management, logistics management, investment
appraisal, development of environmental performance
indicators, environmental cost tracking, etc.
Illustrate the efficiency benefits of EMA for both business
and government, and the links between physical and
monetary information
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Chapter 6
SELECTED EXAMPLES OF EMA APPLICATIONS AND
LINKS TO OTHER TYPES OF ACCOUNTING AND
REPORTING
Examples of Links to
• National Accounting & Reporting
• Financial Accounting & Reporting
• Corporate Environmental Performance Reporting
Examples from Australia, Denmark, Japan, the UK, the
European Commission, and the United Nations
Illustrate similarities and differences between the
types of information collected under these schemes
compared to EMA
illustrate the potential for EMA to inform these
schemes, and vice-versa
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For More Information…
The International Guidance Document on EMA is
available on the IFAC website:
http://www.ifac.org/News/LastestReleases.tmpl?NID=1124902574170148
Introductory Brochures on EMA for business or
government are available on the UN website:
http://www.un.org/esa/sustdev/publications/EMABusiness.pdf
http://www.un.org/esa/sustdev/publications/EMAGovernment.pdf
Many other resources are available on the
International EMA website:
http://www.EMAWebsite.org
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