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Sustainability requires companies to develop in an economically, environmentally and socially sustainable manner. Corporate sustainable development in turn requires movement towards cleaner production. In order to recognize the potential from cleaner production – reduced costs and fewer environmental impacts through the reduced use of materials – environmental management accounting (EMA) is a necessary information management tool.

Environmental Management Accounting for Cleaner Production reveals a set of tools for companies to collect, evaluate and interpret the information they need to estimate their potential to use cleaner production to realize cost savings and to make the best decisions about the available cleaner production options. EMA is therefore the key for driving environmental progress, cost savings, increased competitiveness and corporate sustainability through the means of cleaner production.

Inhaltsverzeichnis

Frontmatter

Introduction and Structure

Frontmatter

Chapter 1. Environmental Management Accounting (EMA) as a Support for Cleaner Production

Abstract
The potential for Cleaner Production (CP) to benefit businesses is well-demonstrated, but it is not yet as widely adopted as might be expected. This is unlikely to be entirely because of the lack of adequate information—other possible reasons could be that (i) CP is commonly seen as being only relevant to manufacturing, (ii) the institutional framework does not encourage the adoption of CP as well as it might do, and (iii) there is no single one-to-one relationship between organisational change (such as a move to CP) and accounting change.
This contribution addresses the last-mentioned reason for hindrances to the wider adoption of CP and investigates the relationship between CP developments and innovations in relation to information requirements and accounting.
Three distinct strategies can be identified through which CP might benefit business: efficiency, consistency, and sufficiency. So far CP policies and promotion have focused only on efficiency strategies. However, each of these strategies has differing information needs which might be at least partially met by EMA. Two factors that will affect the type of information that is most appropriate in any situation are (i) how radical and innovatory (rather than merely incremental) any particular change is, and (ii) whether a particular innovation is new and as yet only experimented with by a few early adopters, or applied in a mass market.
Stefan Schaltegger, Martin Bennett, Roger L. Burritt, Christine Jasch

EMA in Cleaner Production—Theories and Models

Frontmatter

Chapter 2. Applying Best Available Techniques in Environmental Management Accounting: From the Definition to an Assessment Method

Abstract
This paper presents a method to evaluate the efficiency of industrial processes in comparison with, or to validate, best available techniques (BAT). The approach can be used as decision support in applying environmental regulations as well as to put in place an environmental management accounting system.
The European Directive 96/61/EC 24 September 1996 on integrated pollution prevention and control (IPPC) integrates environmental protection by a process of licensing all industrial activities at the European level. The objective of this directive is to reach a coherent level of environmental performance through the use of BAT.
Twelve considerations are given in Appendix IV of the IPPC directive for BAT selection which was adopted as French environmental regulations. Since these complicated concepts were put into practice some type of decision aid or support is necessary for the industries concerned. To clarify the meaning of each aspect and to better evaluate techniques, a study was carried out based on a questionnaire. This endeavour gave rise to a selection method. The results show a possible lack of homogeneity and inaccuracy in the considerations of the IPPC directive. The study also established seven objectives to be taken into account when selecting the BAT. For each objective, criteria, indicators and measurement parameters were determined. Finally, the suggested method could be used to assess relevant options for the continuous improvement of BAT or cleaner production implementation.
Valérie Laforest

Chapter 3. Estimating Environmental Impact in the Early Stages of the Product Innovation Process

Abstract
During the early stages of a company’s innovation process (e.g. orientation and generation of ideas), sustainability concerns are only taken into account in the form of strategic guidelines. In contrast, many different methods, tools for design, and impact assessment, support the decision-makers at the end of the innovation process (e.g. in the phases of realization and product development).
An approach for environmental impact estimation of product ideas based on the guiding barrier concept by Fichter and Paech (2003) is presented. The approach uses the stage gate methodology by Cooper (2001) and action strategies for the reduction of environmental impacts of a product by Brezet and van Hemel (1997, 139). These action strategies are attributed to the different phases of the stage gate process and are supported by practical questions.
The approach thereby makes use of the widespread assumption that there is a high degree of influence on product properties and corresponding environmental impacts at the early phases of the innovation process.
The estimation of environmental impacts in the early phases of the innovation process is based on information about substances, materials and processes. This information can be obtained in part from the internet as an external information source. Search strategies are described how such information retrieval can be facilitated. It is based on using search engines and publicly available internet databases on environmental impacts of substances, materials and processes.
Claus Lang-Koetz, Severin Beucker, Daniel Heubach

Chapter 4. Unravelling the Impacts of Supply Chains—A New Triple-Bottom-Line Accounting Approach and Software Tool

Abstract
Companies wishing to realise broader societal and environmental objectives often choose Triple-Bottom-Line (TBL) accounting as a reporting approach. TBL accounting covers social, economic and environmental indicators and thus enables decision-makers to quantify trade-offs between different facets of sustainability. Two issues are critical when considering TBL accounting. Firstly, indicators must include both the direct (on-site, immediate) effects of the company as well as the indirect (off-site, upstream, embodied) effects associated with purchasing from a potentially large and distant web of suppliers. The incorporation of all indirect or upstream impacts removes problems related to the choice of boundaries. Secondly, it is important to address the question of how to assign responsibility for the indirect impacts as these are shared between partners in a supply chain and must not be double-counted.
The research question of this work is therefore how can corporate sustainability performance be quantified and compared in practice whilst taking into account the responsibility-sharing nature of trading and avoiding double-counting of impacts? We (a) describe the analytical approach to measure the indirect impacts of a comprehensive TBL account of a producing entity; (b) present a quantitative concept of shared responsibility as a solution to assigning responsibility to both producers and consumers in a mutually exclusive and collectively exhaustive way; and (c) demonstrate practical applications in examples of quantification of indirect impacts, supply chain contributions, and shared responsibility.
Thomas Wiedmann, Manfred Lenzen

Chapter 5. Life-Cycle Based Sustainability Assessment of Products

Abstract
Sustainability was adopted by United Nations Environment Programme (UNEP) in Rio de Janiero as the main political goal for the future development of humankind. It should also be the ultimate aim of product development. According to the well-known interpretation of the original definition given in the Brundtland Report, sustainability comprises three components: environment, economy, and social aspects. These components or ‘pillars’ of sustainability have to be properly assessed and balanced if a new product is to be designed or an existing one be improved.
Depending on the systems to be improved, in the sense of better sustainability, and to the audience(s), i.e. actors or stakeholders, different scientific and practical approaches are being developed. There are notably two directions which can be distinguished: one based on accounting (Environmental Accounting and Environmental Management Accounting—EMA) and another one based on the Life-Cycle Assessment (LCA) of products. In this article, the latter approach is described in the hope of improving the mutual understanding of the two communities and their assessment/accounting tools. The responsibility of the researchers involved in the assessment of sustainability is to provide appropriate, reliable, and up-to-date instruments. For the environmental part, there is already an internationally standardised tool: Life-Cycle Assessment (LCA). Life-Cycle Costing (LCC) is the logical counterpart of LCA for the economic assessment. LCC surpasses the purely economic accounting and cost calculation by taking into account the use- and end-of-life phases and hidden costs. For this component, a guideline is being developed by The Society of Environmental Toxicology and Chemistry (SETAC). It is a very important point that different life-cycle based methods (including Social Life-Cycle Assessment ‘SLCA’) for sustainability assessment use consistent system boundaries.
SLCA has been neglected in the past, mainly due to great methodological difficulties, but is now beginning to be developed. The central problems seem to be how to relate the social indicators (social impact assessment) quantitatively to the functional unit of the product-system, and how to restrict to a manageable number the many social indicators proposed. Furthermore, a better regional resolution of the Life-Cycle Inventory, compared to conventional LCA, has to be achieved since the social conditions vary geographically much more than, the core element of LCA industrial production.
Walter Klöpffer, Isa Renner

Chapter 6. Environmental Statements on the Internet—From a Mere EMAS Requirement to an On-line Environmental Communication Tool

Abstract
The contribution describes an information management approach that elevates the orthodox “one size fits all” disclosure practice of environmental reports to a sophisticated digital stage, using environmental statements according to the European Union Eco-Management and Audit Scheme (EMAS) as an example. The information management approach is illustrated along three basic elements: (1) stakeholder analysis and information requirement analysis (representing information demand); (2) XML-based document engineering (modelling information supply); and (3) an IT-supported reporting system (cross-matching information supply and demand). As a result, environmental statements could be developed from universal documents on print media, and thus a mere EMAS requirement, to valuable environmental communication vehicles that provide substantial and reliable information in a tailored fashion and are available on various media—due to an underlying single source cross-media principle.
Ralf Isenmann

Chapter 7. Phenomenological Model of Cleaner Production

Abstract
This article covers the results of a research project concerning the phenomenological model of Cleaner Production (CP). The model presents trends, calculated as a function of time, that describe changes in environmental impacts per unit of production. The elaborated procedure of the model was verified with numeric data collected from Polish companies participating in the Polish Cleaner Production Programme. The model was verified for all companies participating in the programme (CP Companies) from the research group (the so called Overall Industry Model) and the Polish energy sector (exemplary Branch Model). The model can be used for benchmarking and formulating co’ measurable environmental goals. Environmental performance of these CP Companies was also compared to analogous results achieved by the Polish industry (based on data published by the Central Statistical Office of Poland). The results showed that CP Companies reduced their negative environmental impacts quicker than Polish industry in general. This work was funded as a research project by the Polish Ministry of Science and Information Society Technologies in 2003–2005.
Zygfryd A. Nowak, Michal J. Cichy

EMA Support for Cleaner Production—Case Studies

Frontmatter

Chapter 8. Using EMA to Benchmark Environmental Costs—Theory and Experience from Four Countries Through the UNIDO TEST Project

Abstract
The paper reports the results of the UNIDO TEST project (De Palma and Dobes 2003) as a consequence of simultaneously introducing environmental management accounting (EMA), cleaner production assessment (CPA). and environmental management systems (EMS) in four countries of the Danube river basin. The implementation of CPA was instrumental in identifying non-product output costs. The analysis of materials and energy flows provided the basis for assessing and comparing the performance of the production processes against the standards defined by the technical specifications of the existing technology and against the standards of best available technology (BAT) or theoretical standards. This categorization showed which part of the non-product output costs could be controlled in the short-term, medium-term, and long-term. On the basis of this analysis, companies were enabled to make strategic decisions such as to phase out products and plan new investments in environmental technologies through a step-by-step approach. Broadening the scope of EMA and developing the necessary information system within the framework of the EMS were immediate results of the project.
Maria Csutora, Roberta de Palma

Chapter 9. Sustainable Development in the South African Mining Industry: The Role of Cleaner Production and EMA

Abstract
The South African mining industry is increasingly embracing cleaner production (CP), albeit at a slow pace. Environmental management accounting (EMA) is still poor, in spite of increased awareness of the concept of triple bottom-line accounting. This paper investigates how CP and EMA, by means of examples in the gold mining sector, can assist towards sustainable development.
Mining and sustainable development are not contradictory terms. This paper will examine how the sustainable development principles are applicable within the SA mining industry. The future of the extractive industry is inseparable from the global pursuit of sustainable development. The mining industry is contributing to sustained growth and prosperity of current and future generations through the integration of economic progress, responsible social development and effective environmental management.
South Africa is particularly rich in mineral resources and is one of the leading raw material exporters in the world. South Africa on the other hand, is a water scarce country with mining activities often located in areas with limited water resources. The main challenges faced by the mining industry include proper water and electricity management among others. The implementation of cleaner technologies could be a solution to these challenges. Environmental management accounting and sustainability reporting are tools available to assist the mining industry to successfully achieve sustainable development.
Maryna Möhr-Swart, Faan Coetzee, James Blignaut

Chapter 10. Environmental Management Accounting in the Metal Finishing Industry

Abstract
The article describes an environmental management accounting tool and its application in the metal finishing industry. The benchmarking tool which uses both absolute values and a relative index, monitors resource utilisation and waste production at process-line level and plant level. The tool format is Excel, a Microsoft spreadsheet program. The applied common denominator is the surface area of products, and units are either physical or financial.
The empirical data for the study is provided by a donor-financed cleaner production demonstration project in South Africa which ran from 2000 to 2004. The benchmarking of the metal finishing enterprises indicated potential water savings of 60–90% and savings of chemicals of 20–50%. Modifications of selected full scale plant for national demonstration confirmed these savings and the metal finishing enterprises have moved into the environmental sustainable production chain in South Africa and abroad.
The main challenges in implementing the modifications were social barriers, data retrieval from existing production and cash flow constraints for plant construction.
The principles and methodology described here can also be applied in other wet industries such as the paint, chemicals, wood, plastic, consumer products and hardware products industry sectors, in both South Africa and other emerging economies.
Michael Koefoed

Chapter 11. Chemical Management Services: Safeguarding Environmental Outcomes

Abstract
Every year hundreds of new chemicals with uncertain life-cycle impacts on our health and the environment are being developed and introduced to the market. Reducing the amount and volume of chemicals in use is seen as an important option for reducing associated environmental effects. Chemical management services (CMS) is seen by environmental experts as a business strategy that may allow reduction in the volume of chemicals sold, while maintaining profits from use of chemicals for suppliers. In traditional business the user would try to achieve the same reduction with less support from the supplier. The goal of this paper is to investigate how common performance indicators can be used to monitor the environmental performance of different chemical management strategies and how CMS customers and suppliers can safeguard environmental improvements. The paper draws on experiences from implementing CMS in one of Sweden’s automotive companies and meetings with European CMS providers.
Martin Kurdve

Recent Conceptual Developments in EMA and New Areas

Frontmatter

Chapter 12. The Development of Environmental Management Accounting: An Institutional View

Abstract
This paper explores and synthesises the development of corporate environmental management accounting (EMA) and the possible motivations for EMA from the perspective of institutional theory. The motivation for this paper is a belief that a focus on taxonomy and classification through institutional theory will help to produce better defined theory for scholars to accumulate knowledge about the development of EMA. It considers the possible development of EMA in relation to three pillars: regulatory, normative and cognitive institutions. This leads to an understanding of the development of EMA in four institutional contexts involving (i) direct regulatory pressures, (ii) social environmental movements, (iii) professional structure and inter-professional communication and (iv) environmental mimicry in specific organisational fields. The differences between these institutional influences on the development of EMA are discussed and finally, suggestions are provided about the potential future development of corporate EMA.
Wei Qian, Roger Burritt

Chapter 13. Does Corporate Environmental Accounting Make Business Sense?

Abstract
Businesses do not operate in a vacuum. They are subject to legal requirements and industry practices; they require resources to manufacture products and/or render services; they operate in an environment from which they draw their resources and which may be affected by their activities; and they operate in a community from which they draw their work force and which may also be impacted by their activities. Corporate environmental accounting is one of the tools that can be used by businesses to address these challenges. For an organisation to apply environmental accounting it must make business sense. Implementing environmental accounting may require resources. Therefore, a business must weigh up the benefits and costs thereof.
This paper discusses the four elements of corporate environmental accounting, i.e. environmental management accounting, environmental financial accounting, environmental reporting and environmental financial auditing. The potential benefits that can be derived from each of these elements are discussed. Many benefits can be reaped from implementing different elements of corporate environmental accounting. Some benefits enhance internal efficiency and competitive advantage, whilst others enhance legitimisation and stakeholder relations.
This paper also argues that for the full benefits of corporate environmental accounting to be reaped the elements of environmental accounting should be integrated with each other and in the day-to-day business of an organisation. The linkages and interactions among the elements of corporate environmental accounting as well as the linkages between corporate environmental accounting and the broader business processes of the company are discussed based on a diagrammatic model.
Seakle K. B. Godschalk

Chapter 14. An Environmental Accounting Model for a Natural Reserve

Abstract
The implementation of environmental accounting in a Natural Reserve produced some significant results in terms of restrictions. First, environmental accounting introduced a limitation in scale which was inapplicable on a microscale. A second restriction concerned the use of a physical unit of measure was instead of a monetary unit. A third limitation was because environmental accounting only takes costs into account, not environmental benefits. These three limitations led us to develop an environmental accounting model that considered resources in the Natural Reserve, both consumed and produced. The model aimed to supplement monetary accounting (based on cost and revenue) with environmental accounting which reflects not only environmental costs but also environmental revenues, i.e. environmental benefits. The difference between costs and benefits, both economic and environmental, represented the value produced or consumed by the Natural Reserve.
Francesco Marangon, Maurizio Spoto, Francesca Visintin

Chapter 15. Measurement and Recognition of Wildlife in the Financial Statements of Public Sector Entities: A South African Perspective

Abstract
Wildlife is an environmental asset. However, the concept of financial accounting for wildlife in financial statements is questioned and various arguments are used to not account for it. For example, fauna moves from place to place which complicates counting, the cost of counting wildlife is expensive, monitoring, measuring, and managing of accounting values does not add value, and parks manage wildlife for conservation purposes not to generate profits.
The focus of the international accounting standards is shifting more and more towards fair-value accounting. Fair-value accounting relies on one of the main principles of accounting, namely, estimation which involves judgments based on the latest available, reliable information. The same degree of estimation must be exercised to account for wildlife, and uncertainties such as wildlife numbers and values are recognised by the disclosure of their nature and extent and by exercising prudence in the preparation of financial statements.
Financial statements are prepared on an annual basis to indicate the financial position of an entity and to hold management accountable. Meaningful financial accountability requires timely, understandable, reliable and relevant information. This information is ultimately used by management to report to the shareholders or government on the deployment of funds and resources entrusted to them.
Transparent financial reporting is a prerequisite for a well-functioning market economy and financial accountability is an indispensable management tool that provides essential information for the effective monitoring and controlling of resources. Managing and safeguarding wildlife forms part of this financial accountability.
The absence of financial accounting of wildlife in the financial statements potentially contributes to a deficiency with respect to the availability and usage of management accounting information on wildlife numbers. The theme of this study is that the quality and usage of management accounting information will only be improved and ultimately used for decision-making if the financial accounting is implemented and audited. Complete and accurate management accounting information will allow environmentalists and accountants to evaluate the effect of changes such as drought, diseases, and poaching of animals and the data can further be used to calculate grazing and carrying capacity.
Wynand J. Wentzel, Brian Kevin Reilly, Yvonne Reilly

Chapter 16. Environmental Management Accounting and Environmental Accountability Within Universities: Current Practice and Future Potential

Abstract
The role of management accounting in improving both environmental and financial performance through enhanced accountability is attracting increased recognition. However, universities have typically failed to be the focus of attention, generally, because of a mistaken belief that they generate only insignificant environmental impacts. A case-study of an Australian university demonstrates that there is a general lack of consideration given to the management of environmental costs and related cost-savings, due partly to a perceived lack of appreciation by senior management of the extent of environmental costs being incurred. Further, in the absence of relevant environmental cost information, although environmental sustainability itself is promoted as important, efforts to improve internal environmental accountability from an accounting perspective are lacking. In this study, interviews were conducted to identify barriers which affect the adoption of EMA. The results show that perceived institutional pressures and a low profile of accounting for the environment, and management’s attitudes influence the adoption of EMA within universities.
Huei-Chun Chang, Craig Deegan

Chapter 17. The IFAC International Guidance Document on Environmental Management Accounting

Abstract
This paper describes the core elements of the International Guidance Document on Environmental Management Accounting (EMA), recently published by the Board of Directors of the International Federation of Accountants (IFAC) at www.ifac.org.
Christine Jasch, Deborah E. Savage

International EMA Developments and Surveys

Frontmatter

Chapter 18. Environmental Performance Indicators—Key Features of Some Recent Proposals

Abstract
The paper identifies some key features of the thinking in the United Nations Conference on Trade and Development document “A Manual for Preparers and Users of Eco-efficiency Indicators” (2004). The UN approach is compared with that of the Global Reporting Initiative (GRI) in the third generation of its Sustainability Reporting Guidelines issued October 2006 (GRI 2006) and with that set out in “Environmental Key Performance Indicators—Reporting Guidelines for UK Business” (DEFRA and Trucost 2006). Reference is also made to some of the performance indicators given as examples in the international standard on management evaluation of environmental performance issued in 1999 by the International Organisation for Standardization (ISO 14031).
The paper is intended to provide an overview rather than a detailed analysis. It looks at the extent to which the proposals under review are based on a conceptual framework, the principal impacts addressed, and the guidance provided as regards definition and compilation of the performance indicators.
The differing approaches adopted in the proposals give rise to a number of questions:
1.
Is there a prospect of convergence amongst “standard setters” on the key environmental performance indicators?
 
2.
In the meantime, do any of the proposals assist organisations in identifying key environmental performance indicators and the information to be reported?
 
The paper seeks to address some of the issues that arise in relation to these questions.
Robert Langford

Chapter 19. The Need for Standardised Disclosure on Climate-Risk in Financial Reports: Implications of the JICPA Reports

Abstract
Climate-change poses various risks to the sustainability of society and has a substantial impact on corporate value in the form of regulation and reputation risks, etc. Correspondingly, many investors are beginning to show an interest in information from companies regarding greenhouse gas (GHG) emissions. However, disclosures concerning climate-risk in both environmental and financial reports are not really adequate for investment decision-making. Although many companies are disclosing GHG emission data in their environmental reports the scope of the emissions covered varies from company to company which makes the information less useful. In relation to this issue the Japanese Institute of Certified Public Accountants (JICPA) published two research reports which examined disclosure practices concerning information on climate-risk in the environmental and financial reports of 26 companies. This study reviews these JICPA reports and discusses a possible direction for climate-risk disclosure.
Takeshi Mizuguchi

Chapter 20. Environmental Management Accounting Practices in Japanese Manufacturing Sites

Abstract
Previous questionnaire surveys on environmental management accounting (EMA) practices in Japan have targeted managers in environmental departments in corporate headquarters as being representative of the company perspective. By conducting a questionnaire survey in manufacturing sites this paper attempts to clarify Japanese corporate EMA practices at the operational level. Since environmental departments in headquarters are presumed to have considerable influence on the introduction and performance of environmental accounting at sites this study analyses the relationship between manufacturing sites and headquarters. As a result, the following points were identified. First, the main purpose of environmental accounting at manufacturing sites is to send data to headquarters. Second, approximately half of the sites in the sample used environmental accounting for internal management and environmental accounting was felt to be more useful at these sites than at those which did not use it for internal management. Third, an effective headquarters advises sites about the introduction of environmental accounting for internal management.
Katsuhiko Kokubu, Eriko Nashioka

Case Studies in EMA

Frontmatter

Chapter 21. Waste Reduction Program Based on IFAC’S EMA Guideline in Danisco A/S

Abstract
In 2005 and 2006, Danisco A/S carried out a corporate pilot program, Global Waste Initiative, for testing the adequateness of International Federation of Accountants guidance document on environmental management accounting (EMA) as a tool for production sites in the global bio-tech and food ingredients industrial sector. The chosen pilot sites were diverse from a geographical and production process point-of-view demonstrate differences and similarities. The objectives of the assessments were (1) to investigate EMA as a strategic cost assessment tool for subsequent identification and evaluation of environmental saving initiatives; (2) comparison of EMA results versus annual, reported environmental costs for production sites; (3) to evaluate EMA as a benchmarking tool; and (4) to evaluate required resources for future EMA assessments. The main conclusions of the three pilot assessments were that the overall environment-related costs are considerably higher than the perception of the individual sites and their management. Additionally, the assessments demonstrated a need for strengthening the relation between the environmental and accounting functions of a manufacturing facility to make use of EMA for improvement of environmental efficiency.
Lars Munkøe, Christine Jasch

Chapter 22. Implementing Material Flow Cost Accounting in a Pharmaceutical Company

Abstract
In Japan, several dozen companies are now attempting to introduce material flow cost accounting (MFCA) through a project initiated by the Ministry of Economy, Trade and Industry (METI) and others. Nevertheless, the majority of companies that have introduced MFCA have used it in only a single project for the purpose of cost study and few companies use it continually to conduct improvement activities. In this paper, we present the case of Tanabe Seiyaku Co. Ltd., which has succeeded in the implementation and organisation-wide deployment of MFCA, in order to analyse the primary factors leading to the use of MFCA in continual waste reduction. Our results demonstrate that MFCA data is reflected in the departmental and employee performance evaluation at Tanabe Seiyaku as part of its management control systems and this mechanism is the key to the continual use of MFCA within the company.
Yasushi Onishi, Katsuhiko Kokubu, Michiyasu Nakajima

Chapter 23. Operational Use of the Environmental Accounting and Information Software TEAMS at Hydro Aluminium Sunndal, Norway

Abstract
This paper presents findings of an intrinsic case study about how Hydro Aluminium Sunndal, Norway (HAS) implemented a environmental management accounting tool (Total Environmental Accounting and Managements System, TEAMS) in 2003. The case study focussed on how TEAMS could be implemented as an effective information and reporting tool at HAS.
HAS is located in Møre and Romsdal, western Norway, and is operated by Norway’s largest industrial group, Norsk Hydro ASA (Hydro). Hydro is the third-largest integrated aluminium supplier in the world, with a presence on every continent. Hydro’s history and commitment to the United Nations Global Compact principles is the context and perspective of the study of environmental performance on a local scale.
At site-level, a need for more detailed and relevant information on certain emissions, working environment, noise pollution and waste management was identified. The assessment of TEAMS, as a reporting tool, showed that the system is capable of meeting these specific site reporting needs. However, achieving accurate reporting requires that the implementation process is well planned and that sufficient resources are available during the initial phase.
The network of spreadsheets previously in use for environmental management activities, such as accounting and reporting, creates an unnecessarily complex, brittle and vulnerable system. TEAMS will arguably represent a much more resilient and effective information system compared to the present system at HAS. Another important benefit connected to new reporting trends, such as sustainability reporting, is that TEAMS facilitates effective communication with stakeholders.
John E. Hermansen, Anne Kristine Mølmen-Nertun, Grunde Pollestad

Chapter 24. Failure of an Environmental Strategy: Lessons from an Explosion at Petrochina and Subsequent Water Pollution

Abstract
This article discusses the relationship between environmental strategy and performance, based on a case of a famous Chinese company. Though having good management systems and an environmental strategy in place, the company has recently had several serious environmental and safety accidents. By comparing its operating strategy and financial performance with its environmental strategy and performance, the paper aims to show that having an environmental strategy does not necessarily ensure good environmental performance. Integration of the environmental strategy with the operating strategy will help to implement environmental goals and financial goals in the long run. The paper also provides some suggestions on how to integrate both strategies.
Xiaomei Guo

Success Factors in Implementation

Frontmatter

Chapter 25. Evaluating Management Accounting from a User Perspective: A Study of the Environmental Accounting System of the Environment Agency in England and Wales

Abstract
The Environment Agency in England and Wales developed its Environmental Accounting System (EAS) with several aims, one of which is to provide a management accounting tool to support managers across the agency. This paper explains the EAS and reports on a study that took a user-oriented approach to evaluate its effectiveness in this. The research found that at the time of this study, the information generated by the EAS was not yet being used for this purpose as anticipated, but that both current and potential future users were able to identify several further potential uses for EAS information and suggest ways in which it might be further developed, with implications for the role of those managing the EAS.
Martin Bennett

Chapter 26. An Empirical Examination of the Role of Environmental Accounting Information in Environmental Investment Decision-Making

Abstract
An experiment is used to investigate two important factors associated with environmental investment decision-making by managers: the regulatory regime in which the firm operates and the nature of environmental information used as a decision aid. Two regulatory regimes are examined, a command and control regulatory regime and a voluntary self-regulatory regime. Two accounting systems are contrasted, environmental management accounting and conventional management accounting, thereby providing a 2 × 2 experimental design for the empirical study. The paper considers environmental investment decision-making by different types of managers working in the Australian offshore petroleum industry. These empirical results indicate that environmental accounting information has a more significant influence on the willingness of managers to incorporate environmental considerations into investment decisions and to avoid future environmental risks, than does the type of regulatory regime.
Tapan K. Sarker, Roger L. Burritt

Chapter 27. Success Factors in Developing EMA—Experiences from Four Follow-Up Case Studies in Finland

Abstract
Pressure to include environmental issues in corporate decision-making is increasing. Environmental Management Accounting (EMA) is a tool-kit for monitoring environmental loads and costs caused by a company’s processes and thus it is essential for effective environmental management. This paper aims to identify the success and failure factors in EMA development, on the basis of four longitudinal case studies conducted in large Finnish companies in the period 1996–2005. In the mid-1990s, pilot EMA systems were designed and implemented in these companies, and in 2005, the current state of their EMA practices was recorded by interviewing corporate representatives and studying corporate reports. This followup study showed that only one of the companies had voluntarily and successfully continued developing its pilot EMA system, whereas the others had abandoned their systems as not being value-adding. The motives behind this outcome are important to clarify in order to ensure that further EMA research and development focuses on essential questions.
Anna Kumpulainen, Tuula Pohjola

Backmatter

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