Project overview
Accounting for a Better Bottom Line and a Better Environment
Background
In the quest for sustainability, there are many players, including accountants.
The role accountants could play in sustainability was initially recognised by EPA through the cleaner production program. It was observed that some firms were making suboptimal business decisions, leading to negative environmental impacts, because their internal accounting system did not properly account for environmental costs and benefits.
For example, EPA has found that some companies choose waste disposal over waste reduction because their accounting system records disposal as a cheaper option. Disposal might appear cheaper because most costs associated with wastes (environmental costs) are placed in overhead accounts and therefore are not properly allocated.
EPA believes that environmental management accounting assists companies to identify the full range of environmental costs and benefits within traditional accounting systems, which may lead to improved decision-making.
Project objective
Undertaken by The Institute of Charted Accountants in Australia (ICAA), in conjunction with EPA and Environment Australia (now the Australian Government's Department of the Environment and Heritage), the Environmental Management Accounting (EMA) Project focused on promoting improved practices and reform in management accounting so that organisations are able to improve profitability while achieving better environmental outcomes.
The objective was achieved by undertaking case studies that showed the benefits from, and provide practical "how to" examples of, environmental management accounting.
The case studies were undertaken within organisations operating in Australia between March and September 2002, and their results were included in the publication Environmental Management Accounting: An Introduction and Case Studies for Australia.