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Über dieses Buch

Recognizing the increasing importance of environmental issues, energy prices, material availability and efficiency and the difficulty of adequately managing these issues in traditional accounting systems, several companies all over the world have started implementing “Environmental and Material Flow Cost Accounting” (EMA and MFCA).

“Environmental and Material Flow Costs Accounting” explains and updates the approach developed for the United Nations Department of Economic and Social Affairs (DSD/UNDESA) and the International Federation of Accountants (IFAC) and in addition includes experiences of several case studies and recent developments regarding EMA and MFCA in national statistics and ISO standardization.



1. What Is EMA and Why Is It Relevant?

Chapter 1 discusses the terms, range and relevance of environmental costs and environmental accounting. Section 1.1 briefly reviews why organizations should care about environmental issues and who should be involved in the set up of an EMA system. Section 1.2 relates the information needs for environmental performance monitoring with challenges for current accounting practices. Section 1.3 provides definitions for Environmental Costs, Environmental Accounting (EA) and Environmental Management Accounting (EMA). Section 1.4 briefly outlines the terminology of accounting concepts. Section 1.5 describes the physical accounting part of EMA. Section 1.6 relates EMA to financial, statistical, environmental and sustainability reporting requirements. Section 1.7 explores EMA uses and benefits.

2. The Input Side of the Material Flow Balance

Chapter 2 describes the input side of the material flow balance. The physical accounting information collected under EMA is a prerequisite for the calculation of many environment-related costs. Mass balances in volumes, energy content and liters and materials flow accounting in monetary terms are the basis for EMA assessments. Inputs are any energy, water or other materials that enter an organization. Materials Inputs comprise raw and auxiliary materials, packaging materials, merchandise, operating materials, water and energy.

3. The Output Side of the Material Flow Balance

Chapter 3 describes the output side of the material flow balance, which is assessed only in physical, not monetary terms, as the related costs are traced separately. Outputs are all products, wastes and emissions that leave an organization. Product Outputs are products and by-products including their packaging. Non-Product Outputs comprise solid waste, wastewater and air emissions. Any Output that is not a Product Output is by definition a Non-Product Output (NPO) and comprises waste and emissions in solid, liquid and gaseous form.

4. Environmental Performance Indicators

Chapter 4 deals with environmental performance indicators, which for the operational system are directly derived from the input output material flow balance. The definitions provided in the ISO 14031 standard as well as the related indicators recommended by the Global Reporting Initiative are described. In addition the chapter discusses requirements and system boundaries for indicator systems and specifically addresses the problem of finding meaningful denominators for performance indicators. The chapter concludes with a case study from the brewery in Murau which calculates savings based on their environmental performance indicator system.

5. Environmentally Relevant Equipment

Chapter 5 describes the different types of environmentally relevant equipment, which is often the first step when conducting an EMA assessment. The term “equipment” may comprise a single machine or an entire production hall, but the assessment is best performed on a cost center level. In order to provide the necessary data for investment appraisal, actually three categories of environmentally relevant equipment should be distinguished:
  • End-of-pipe equipment for treatment of waste and emissions
  • Integrated cleaner technologies which prevent emissions at source
  • Scrap producing equipment and energy conversion losses
The different approaches of IFAC, UN DSD and UNIDO in opposition to SEEA and CEPA regarding the inclusion of cleaner technologies and integrated prevention are highlighted.

6. Monetary Information

Chapter 6 describes the different environmental cost categories in detail. They are based on the classification in the IFAC EMA Guidance Document. For each cost category the sub-categories relating to financial accounts, such as equipment depreciation, operating materials, water, energy and personnel are discussed and examples provided. In addition, environment related earnings from grants for investments or from scrap sales are described. National statistical institutes require reporting of environmental costs by the environmental domain affected. The chapter concludes with a case study of the pulp and paper company SCA Laakirchen, which shows the average percentage distribution of the previously described environmental cost categories.

7. Linking Physical and Monetary Information

Chapter 7 focuses on linking the physical and monetary information system. It starts with consistency and consolidation issues to be considered when defining the system boundaries for an EMA assessment and when aggregating data from several sites or companies. The chapter deals with information available on the company level, traces environmental aspects in the balance sheet and where to find them in the profit and loss accounts. Section 7.4 goes one step further down into the organization and highlights the principles and terminology of cost accounting, process flow charts and overhead cost attribution. The concepts of activity based costing and material flow cost accounting are explained as well as where to get the necessary data from stock management and production planning systems. The last issues dealt with are application for investment appraisal, budgeting and benchmarking. Danisco, a global supplier to the food industry, uses EMA as a tool primarily to benchmark production sites, which are divers from a geographical and production process point of view in order to demonstrate differences and similarities.

8. Case Study of a Brewery

Chapter 8 describes a case study developed from the brewery Murau in depth and at the same time demonstrates how to use the excel template for the EMA cost assessment that is provided as a download under and

9. How To Organize An Ema Pilot Project

Chapter 9 describes how to organize an EMA pilot project. The competencies of the project team, selection of sites for pilot testing and a general project plan are discussed. The result of such an EMA pilot assessment may be a company specific adoption of the excel template with more specific cost categories and predefined sources of information as well as an internal procedure which specifies roles and responsibilities. Extracting EMA data from Enterprise Resource Planning Systems and possible elements of an internal EMA assessment standard are explained based on experiences of case studies with Verbundgesellschaft, OMV and Petrom. The chapter ends with a summary of recommendations from about 50 case studies performed so far. The outlook tries to analyze, why companies have been so slow in adopting EMA and MFCA since there is little merit in two separate information systems in an organization, one for financial and cost accounting, the other for process technicians, if “in principle“ they should be the same, following the material flows through the company.


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