Environmental and Sustainability Management Accounting (EMA) for Advancing Sustainability Management

Managing the Integration Challenge between Corporate Environmental Strategy and Environmental Management Accounting: Perspectives from Sri Lanka

Despite the increasing popularity of environmental and sustainability management accounting (EMA) in corporate sustainability management, researchers in the sustainability accounting and sustainability management field neglect the importance and the relevance of national culture and its effect on the level of implementation of sustainability accounting and management practices. Yet, to our knowledge, there is no recent study of how national culture affects corporate environmental and sustainability management accounting practices in the different nations where they operate. In order to provide new insights into the link between national culture and EMA practice, we adopt Gray’s (1988) Abacus 24(1):1–15 theory of cultural relevance in national accounting systems. In brief, Gray proposed a framework to explain how national culture affects national accounting system using Hofstede’s (1986) The cultural context of accounting: accounting and culture. Paper presented to annual conference of the American Accounting Association, New York culture dimensions. An understanding of the national culture and its effect on the adoption and implementation of EMA can help us to improve the relevance of EMA practice and implementation in different countries. Based on Gray’s (1988) Abacus 24(1):1–15 framework, we develop the link between national cultural values and EMA values. As original contributions to sustainability accounting, we propose four EMA value dimensions (symbolic versus action, reactionary versus responsible, voluntary versus transparent, and integration versus differentiation).

Interests in and understanding of supply chain management are growing, along with a number of catalysts which include: reduction in trade barriers; development of logistics structures as a counterforce to globalisation; and reduced geographical spread in business. This raises a set of challenges for sustainable supply chain information management which is explored here, including: confidentiality and business records; cost-management and eco-efficiency; socio-cultural distance; complexity; and the need for rapid responses to the situation when a crisis occurs. These challenges lead to a critique of conventional cost management and the need to make sure credible information is provided in the supply chain relationship. A comprehensive Environmental Management Accounting (EMA) framework reveals that the links between sustainability management accounting and different decision settings are not clear in the supply chain relationship. The papers presented in this book provide a guide towards improved knowledge of EMA and supply chain accounting interrelationships, challenges and potential successes.

The purpose of this paper is to present an empirical case for research in environmental management accounting and/or environmental cost accounting. The paper provides an analysis of the current status of environmental management and/or environmental cost accounting at the industry level. The author explores the extent of management research in the field of corporate sustainability management and environmental management accounting. The study employs a survey method for identifying factors to adopt environmental cost accounting and its guidelines within organizations in Korean manufacturing industry contexts. The paper uncovers those manufacturing industries' views on motivations and obstacles to adopt environmental cost accounting and its guidelines, and general perceptions on related issues. It is found that there is a lack of a systematically structured approach to implement environmental cost accounting internally in practice. The study also finds that some difficulties to adopt environmental cost accounting in practice are caused by the existing accounting and information system. The paper suggests where further contributions might be made by future research endeavours engaging with different industry sectors and country levels. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

Preface. 1. Environmental Management Accounting: Innovation or Managerial Fad? Pall Rikhardsson, Martin Bennett, Jan Jaap Bouma and Stefan Schaltegger. Section 1 Progress. 2. Challenges for Environmental Management Accounting Roger L. Burritt 3. Current Trends in Environmental Cost Accounting - and its Interaction with Eco-Efficiency Performance Measurement and Indicators Stefan Schaltegger and Marcus Wagner. 4. Environmental Accounting Dimensions: Pros and Cons of Trajectory Convergence and Increased Efficiency Pontus Cerin and Staffan Laestadius. 5. Process and Content: Visualizing the Policy Challenges of Environmental Management Accounting Dick Osborn. Section 2 Exploring EMA implementation issues. 6. Environmental Performance and the Quality of Corporate Environmental Reports: The Role of Environmental Management Accounting Marcus Wagner. 7. Environmental Risk Management and Environmental Management Accounting - Developing Linkages Roger L. Burritt. 8. Using Software Systems to Support Environmental Accounting Instruments Claus Lang, Daniel Heubach and Thoms Loew. 9. Applications of an Environmental Modelling System in the Graphics Industry and Road Haulage Services Tuula Pohjola 10. Process-based Environmental Cost Accounting for Small and Medium-sized Companies Natalie Wendisch and Thomas Heupel. 11. Environmental Account Systems in Small and Medium-sized Enterprises. How to adapt existing Accounting Systems to EMA Requirements Alessia Venturelli and Aldo Pilisi. Section 3 National Experiences in Implementing EMA. 12. Environmental Accounting Guidelines and Corporate Cases in Korea: Implication for Developing Countries Byung-Wook Lee,Seung-Tae Jung and Jeong-Heui Kim. 13. Environmental Management Acconting: Current Practice and Future Trends in Argentina Graciela Maria Scavone.14. Environmental Management Accounting in the Framework of EMAS II in the Czech Republic Jaroslava Hyrslova and Miroslav Hajek. 15. The Role of Government in Promoting and Implementing Environmental Management Accounting: The Case of Bangladesh Abdul Hannan Mia. 16. Environmental Management Accounting Practices in Japan Katsuhiko Kokubu and Eriko Nashioka. 17. Environmental Management Accounting - Pilot Projects in Costa Rica Christine Jasch and Myrtille Dense. Index.

Environmental management accounting (EMA) enables a company to analyze its impacts on the natural environment as well as provide information to managers to help them become aware of, and address, environmentally driven monetary impacts on the company (p. 32). Given the internal, proprietary focus of management accounting and the specialized nature of environmental management accounting, there is not a great deal of published material available to describe what companies are actually doing in the EMA area. Thus, this book makes an important contribution by providing 12 concrete examples of how EMA activities are being conducted in small and medium-size enterprises in Southeast Asia. The companies range in size from eight to 1,600 employees and include four cases in the Philippines, four in Vietnam, two in Indonesia, and two in Thailand.The case development was motivated by two research questions (pp. 42–43): (1) “How do different organisational environments and institutional settings influence the implementation of EMA in South East Asia?” and (2) “How do EMA tools interact and complement each other to support managers in decision-making?” The data collection process to develop these cases is best described as action-based research. The authors, with the aid of local resource people, were involved in the EMA process to the extent that “some of the companies would not have succeeded in actually implementing EMA without researcher involvement” (p. 49).The book begins with some general discussion about the subject of EMA. This discussion is based around a very useful, multi-dimensional framework that categorizes decision settings and tools. The dimensions include the following dichotomies: (1) monetary and physical, (2) short-term and long-term, (3) future-oriented and past-oriented, and (4) ad hoc and routinely generated. These dimensions are combined to form a 16-cell framework. So, for example, the monetary, long-term, future-oriented, ad hoc cell refers to the EMA tool of monetary investment appraisal. Every one of these 16 cells is covered by at least one of the cases in the book, and seven of the cells are covered by four or more cases. Space does not permit a full description of each of the 12 cases, but in order to capture the flavor of the cases, each is described briefly, as follows.Chapter 4, EMA for eco-efficiency in a towel production firm, deals with the firm of Indah Jaya in Indonesia. Indah Jaya is ISO 14001 compliant, which is a requirement of many of the company's customers who are large department stores chains. Although Indah Jaya monitors issues such as energy consumption, hazardous substances, and legal requirements, this information has not been linked to production planning and control. A material flow cost accounting (MFCA) is conducted, and the chapter provides the details of the effect of energy and water consumption on product pricing. The results serve to focus attention on the management of product material losses as well as the inclusion of certain production processes in job order costing.Chapter 5, Managing HSE in a mechanical engineering firm, highlights efforts by Bisma Jaya, an engineering and construction firm in Indonesia, to improve health, safety, and environment (HSE) measures in response to HSE audits conducted on the company by customers. Without a satisfactory HSE ranking, the company was facing the risk of being disqualified from the job tender process. An extensive table is provided in the chapter that details the various HSE measures and what achievement of the measures would cost. The HSE measures are ordered according to cost-effectiveness to demonstrate how the company could optimize its HSE ranking as cheaply as possible.Chapter 6, Material flow cost accounting in a snack producer, focuses on the production of peanut snacks at JBC Food Corporation in the Philippines. The company had implemented a software-based environmental performance indicator system that monitored a large number of indicators, including electricity usage and waste and waste water treatment. As is a common issue across several of the cases, these indicators were not linked to monetary measures and financial performance. A physical flow chart was developed, and an MFCA was conducted. These tools demonstrated that about 10 percent of total production costs were caused by material losses, and as a result management understood that a focus on methods for boiling and peeling peanuts had the greatest potential for improving financial performance by reducing waste and energy demand.Chapters 7 and 8 represent a two-part case analysis of Oliver Enterprises, a company in the rice milling industry in the Philippines. Chapter 7, EMA for cleaner rice processing, describes how the company disposed of rice husks by dumping them in open fields and burning them. This led to a number of social and environmental issues: open-field burning is difficult to control; dumping and burning reduced productivity of the land; and the Philippine government had passed new environmental regulation prohibiting such activity. The company used a monetary environmental assessment appraisal to investigate a process to carbonize the rice husks and sell the output to fertilizer manufacturers. As a result of the analysis, the initiative went ahead. Unfortunately, after conducting an ex post assessment of the environmental investment, it became evident that the expectations for technical capacity of the carbonization process as well as the market for carbonized rice husks were too optimistic. Thus, in Chapter 8, EMA for reducing greenhouse gas emissions in rice processing, Oliver Enterprises takes another approach and looks at using rice husks as fuel for co-generation. The chapter describes the utilization of a monetary and a physical investment appraisal to determine which configuration of co-generation would be the most efficient.Chapter 9, Environmental impact assessment, compliance monitoring and reporting in electroplating, describes Well-Ever, a company that was motivated to use EMA because of supply chain pressures and regulatory requirements. The business was relocating and needed the necessary environmental compliance certificate from the government to commence operations in a new location. In addition, local government authorities required ongoing environmental monitoring and reporting. As a result of the EMA analysis, the company understood how to change its production processes to become more cost-efficient and be compliant with regulation at the same time.With Chapter 10, Relevant environmental costing and decision-making in a saa paper manufacturer, the book covers the first of two cases set in Thailand, where it is noted there is an environmental regulatory framework in place but with limited inspection.11 Saa paper is made from the bark of the mulberry tree. The owner of Classic Crafts was concerned about profitability and saw EMA as a way to inform efforts at cost reduction. A description is provided in the chapter of how material and energy flows were charted. This resulted in changes to the job costing system and a reversal of the decision about whether to sell low-quality paper or use it as an input in future production.Chapter 11, Environmental risk assessment at a pulp and paper company, focuses on an ISO 14001 certified paper mill, Thai Cane Paper, which realized that water was no longer a “free” good. The mill was faced with an increased risk of water shortage due to the installation of a power plant and declining rainfall. Analysis consisted of an examination of change in water flows and use, as well as predicting long-term changes in water supply and usage. EMA confirmed that changes were needed in water storage and recycling practices or the company would risk the possibility of being unable to continue operations in the dry season.Chapter 12, Decoupling economic growth from pollution, investigates the application of EMA at Tan Loc Food, a food-processing company in Vietnam. The company, operating in three houses, was in the process of consolidating operations into a single location in an industrial area. The company was going to be faced with a waste water fee for discharge in the new location. Production flow charts were developed to better understand material and energy flows, including the use of water. As a result, employees began separating and collecting solid organic waste as well as organic matter from waste water. By selling these by-products to farmers, the company increased revenue by €2,250 per year and reduced solid food waste by almost 100 percent and organic matter in wastewater by 40 percent.Chapter 13, Supply chain information and EMA in coffee exporting, describes the process of environmental supply chain costing and management in a coffee refining and exporting enterprise called Neumann Vietnam. The company was looking for ways to increase profitability, and the reader is told that the largest environmental cost savings are to be had upstream during the farming process, and downstream during the coffee consumption process. Farmers supplying the coffee beans were using more than twice the fertilizer needed. A positive supply chain effect could be realized if Neumann Vietnam assisted the farmers in using fertilizer more efficiently and more effectively. Such cost-savings would enable the farmers to sell the coffee beans more cheaply.The subject of Chapter 14, Environmental and quality improvements as justification for higher capital expenditure and land use in shrimp farming, is Chau Thanh Tam Shrimp Farm in Vietnam. Here, the owner has adapted the conventional approach to farming by installing an additional fish pond and a recycling pond. This has required higher-than-usual capital investment, and the owner is convinced the method is superior from a financial and environmental point of view. EMA analysis confirms that the owner's gut instincts are correct.The final case in the book, Chapter 15, Material and energy flow accounting in beer production, takes place in an ISO 9001 and ISO 14001 certified beer producer, Sai Gon Beer, in Vietnam. The production manager wanted to reduce water and energy usage because he knew it would improve financial performance. The chapter outlines how he worked with the environmental manager to analyze material and energy flows and associated costs and identify a number of capital investments to reduce costs and improve environmental performance.After the 12 cases, the book has a few closing chapters that are meant to summarize the cases and provide some general comments.The biggest strength of the book lies in its abundance of detailed tables and figures. Such supporting material makes the text come alive and enables the reader to grasp the production process and the EMA technique being used. Indeed, the book is very dense, and the technical details are not for the faint at heart. The book also does a good job of demonstrating that environmental considerations need to be incorporated into management decision-making, and to do so necessitates an understanding of material flows and an ability to integrate the physical and the financial.The emphasis on production processes, the material flow cost accounting, and the detailed supporting material means that the book is extremely practical. The cases are not dramatic or earth-shattering cases, but that is their appeal. The cases are very basic and, despite being located in Southeast Asia, the lessons derived from the cases can be applied to small and medium-size organizations anywhere. The book demonstrates that savings are to be had by pursuing EMA in a local setting and that an organization need not be a large, publicly traded multinational to pursue and benefit from environmental management accounting.This book could have been made even more valuable by using the concluding chapters to re-focus on the research questions and provide a more in-depth synthesis and comparison of the cases studies. Instead, an over-reliance is placed on the 16-cell framework and the ways in which the various cases “fit” the various cells in the framework. A less functionalist summary would have been helpful.Issues that would have benefited from elaboration in the concluding chapters are as follows: (1) measurement difficulties, (2) EMA initiation, (3) interdisciplinary nature of EMA, and (4) regulatory and ISO 14001 context.First are the problems associated with measurement. Although several of the chapters do refer to the difficulties in estimating physical flows and financial costs, this is underplayed in the book. For example, the commitment to regular HSE meetings for all employees responsible for HSE was assigned an annual cost of €150. This was calculated at two hours per month for 20 persons, plus snacks (p. 83). Interestingly, opportunity costs were not considered. The salaries of staff involved were not included in the cost because they were already covered and were not seen to create additional costs (p. 88). A detailed discussion of this and other measuring and costing activities would necessitate turning the case into a book, which is not feasible, but more commentary on the measurement difficulties would have been welcome.A second issue that could have been emphasized is the way in which EMA is initiated in a company. In many of the cases, customers provided the motivation for the company to be more environmentally sensitive. Also, there tended to be a champion (or champions) within the company who sought to improve environmental performance (see, for example, page 98). In some cases, the champion was met with resistance. For example, the saa paper manufacturing case noted that the environmental improvements suggested by the production manager were not initially considered relevant by the owner (p. 175). Only when profitability became an issue did the owner get interested in EMA.Third, it would have been helpful if the summary chapters reflected more substantially on the interdisciplinary nature of EMA and the need for interdisciplinary co-operation. For example, pages 168–169 and 218 comment on the information-gathering process and how it was not necessarily being done by management accountants. Indeed, production people, environmental management people, and management accountants all have a role to play.Fourth, more attention could have been paid to the regulatory and ISO 14001 context in which EMA is used. Several of the cases referred to an unenforced legal framework (see, for example, page 176, where Thailand is discussed). In the Philippines, beginning in February 2004, open rice husk burning was no longer permitted. Yet, two years later, over 700 open dump sites were still operating (p. 120). Also, many of the companies in the cases were ISO 14001 certified or were working to become certified. Some summary comments on this aspect and the role of voluntary environmental certification would have been useful.Finally, some mention is needed on the dominant paradigm of the book—eco-efficiency: saving money by managing environmental resources more prudently. The authors note that economic rationality was the driving factor in most of the cases, with technical and legal issues playing an ancillary role. Thus, action is taken on the basis of EMA because it pays or because the company wants to find a cost-efficient way to meet legal and regulatory obligations. Eco-efficiency should not be confused with environmental sustainability (Gray 2010). While the authors never claim to be accounting for sustainability, the tone of the book becomes overreaching every once in a while when it describes a company as being motivated to improve environmental performance. EMA will provide information on how organizations can be less unsustainable, but eco-efficiency and the adoption of EMA techniques is a long way from managing in an environmentally sustainable manner (Buhr and Gray 2012).Despite these comments suggesting how the book could have been enhanced, the book is without doubt a valuable reference and a welcome addition to the field. I would heartily recommend this book to students at all levels, as well as researchers and practitioners. There is much in the book for all of these audiences.The author presents an easy-to-read book based on her Ph.D. at the University of Sydney, addressing subject matter (solvency), which is topical. It follows the prior work of Frank Clarke and Graeme Dean, who have written extensively on the deficiencies of financial reporting and corporate collapses. Solvency is defined, consistent with the Australian Corporations Act (2001), s95A(1), as the ability of an entity “to pay all ... [its] debts, as and when they become due and payable” (p. 4). In terms of public perceptions, solvency is linked to financial distress and corporate collapse. Business pages of newspapers the world over give prominence to any large company that fails. Frequently, the sub-text of such articles includes perceptions of management greed, governance deficiencies, bungled decision making, accounting manipulation, insider trading, fraud, the plight of employees, and those left out-of-pocket. Jensen (1979) argues that journalists have economic incentives to engage in hype and sensationalism, and corporate collapses appear to be good examples of this type of reporting. However, it is worth remembering that evidence suggests corporate failure among listed companies is rare (Francis 2004).This backdrop is useful in considering the objective of the book. As stated on page 6, “The principal aim is to reconsider the solvency notion and to demonstrate through analysis and case data that conventional financial statements are deficient in terms of establishing the dated financial position of an entity and equally lacking with regard to quantifying an entity's state of solvency.”11 All uses of emphasis in the direct quotes are in the original source document. This objective is stated repeatedly: “Throughout this book, it is demonstrated that accounting as financial instrumentation—proved to be faulty—is in need of repair” (p. 15); “… conventional financial statements are shown throughout this work to provide a distorted view of a firm's financial position” (p. 59); “These investigations, as previously explained, indicate that certain accounting deficiencies have existed from the 1960s throughout the 1990s and continue into the new millennium” (p. 90); “For in spite of the attention apparent, accounting processes, its output and its outcomes have been shown to be lacking” (p. 180); “What society has to is on the role of the output of accounting quality of the of financial with regard to the effect on the or of business and its provide an In that and society have the notion that problems in reporting on the financial state of business (p. using case through 7 the conventional financial statements are deficient in quantifying an entity's solvency and equally lacking in establishing its dated financial (p. the cases, this confirmed financial data using a of accounting are in providing with quality financial information on an entity's dated financial (p. the of corporate and business throughout the and into the new the in terms of money and of conventional financial statements (p. and and should change to conventional accounting This is long (p. Thus, the aim of the book is to the case that financial accounting is is the book The author from the many corporate collapses and financial throughout the and this work is important from a public as with a environment by corporate (p. and “These and other cases and the financial they in and this and important from a public and a public (p. it is the is aspect of financial includes a of solvency and describes the research which from of method of (p. I that I no in this but it that case are the form of In Chapter the author the flow of ability of an entity to pay all of its as and when they and the of entity is if the book of its is less than its The author provides an legal case and a detailed of examples of the flow and from this is discussion of the extensive on by and which have better discussion of the Chapter the in of the Australian Corporations which that a as to in the there are to that the company, or entity will be to pay its as and when they become due and payable” (p. are This referred to as the of is suggested to be the author that need to by of (p. it is would in their financial statements are deficient to the extent that are as to the financial position of they any evidence of to this the author have considered a of to whether in this way about their financial begins with a discussion of deficiencies in accounting using as an example, in 9, the be at the of cost and In that “The cost of be assigned by using the or cost The author “The is It a but and too and a It is a method that will by result in an assessment of the financial It can on in in money an entity's (p. A number of statements supporting accounting are is the information its quality is The two of information and in (p. and is of and managers to in a book that an monetary when it is that they determine their financial capacity to pay its (p. This is consistent with prior discussion that accounting is a superior approach and would improve the (p. technical discussion on accounting and of where each entity in a that in a of is for the of the is provided from page the of Chapter 4, the case of is described in some (p. data in the to its and a working capital of three years prior to its and in the financial year prior to its collapse. These data could be as an of accounting information the Chapter 5, the case is and includes an of the in (pp. the reader the the author is almost in her with an on page where is and is to are of a of that with other for by For the extent of its was a and factor in its financial The total of it had was but it was to be relevant to its financial the of the on page are from of for years in and These indicate from operations in the two years prior to collapse. of the flow statements of in the prior to its would that accounting were being 6, in issues in quantifying more case including those of and In the the firm an of a financial and The was based on a provided by the accounting firm for an based on a and went with the accounting firm providing the being In the case of it is what a reader should from this case there were no the case of at issue was the of made to by for as many would that are difficult to it is worth that did not was for a (p. that accounting, once did a good job of the of the with the from in to in This is by (p. which the working capital from in to in The of after to total during the from to as would be if the financial statements were firm performance. I was by the of this other case they appear to support a view that financial accounting actually at with the The author the case as “The point is that financial based on conventional accounting provide limited the quality of which is because the are not of in terms of money and its (p. In the of financial in predicting is well in the if of this is in the Chapter 7, and to the author the of refers to a where the of a company into a new company they also and place the original company into or (p. Some are provided on which suggests that this is a material issue in the Australian Given the of research on the book have been more had it in and provided some more in-depth data analysis on an issue Chapter 7 includes a discussion of the where it is included to increase and to Unfortunately, the did not (p. This is the in the book where are referred which is for two are to the issue of a a firm becomes there is an extensive on and financial distress and which has been could have been more taken in discussion in An is page

1. The Development of Environmental Management Accounting: General Introduction and Critical Review M. Bennett, J.J. Bouma, T. Wolters. Part I: Overviews. 2. An Integrative Framework of Environmental Management Accounting R.L. Burritt, T. Hahn, S. Schaltegger. 3. Environmental Management Accounting Metrics: Procedures and Principles C. Jasch. 4. A Guideline for the Measurement and Reporting of Environmental Costs J-D Kim. 5. Flow Cost Accounting, an Accounting Approach Based on the Actual Flows of Materials M. Strobel, C. Redmann. 6. Resource-Efficiency Accounting T. Orbach, C. Liedtke. Part II: Information Systems. 7. Efficient Eco-Management Using ECO-Integral - How to Save Costs and Natural Resources at the Same Time W. Scheide, S. Enzler, G. Dold. 8. Materials Flow Management Based on Production Data from ERP Systems G. Jurgens. 9. 'Counting what Counts' - Raising Transparency through Environmental Management Accounting at Siemens R.A. Thurm. 10. The Danish Environmental Management Accounting Project: an Environmental Management Accounting Framework and Possible Integration into Corporate Information Systems P.M. Rikhardsson, L. Vedso. 11. Life Cycle Engineering H. Krasowski. Part III: EMA Policies. 12. Corporate Environmental Accounting: a Japanese Perspective K. Kokubu, T. Kurasaka. 13. Environmental Accounting in Korea: Cases and Policy Recommendations B-W Lee, S-T Jung, Y-O Chun. 14. Government Strategies to Promote Corporate Environmental Management Accounting S. Schaltegger, T. Hahn, R.L. Burritt. 15. Looking forKnowledge Management in Environmental Accounting D. Osborn. 16. The Greening of Accounting: putting the Environment onto the Agenda of the Accountancy Profession in the Philippines M.F. Reyes. Part IV: Different EMA Perspectives. 17. Environmental Performance Measurement E. Gunther, A. Sturm. 18. Towards Sustainability Indicators for Product Chains. With special reference to an international coffee chain T. Wolters, M. Danse. 19. Towards Transparent Information on the Environmental Quality of Products - LCA-based Data Production for the Finnish Foodstuff Industry T. Loikkanen, J.-M. Katajajuuri. 20. Prospective Analysis for Implementing an Environmental Management System in Pig Farms: Likely Role of an Environmental Management Accounting System B. Montel. 21. Environmental Management Accounting and the Opportunity Cost of Neglecting Environmental Protection S. Schaltegger, R.L. Burritt. 22. Wanted: a Theory for Environmental Management Accounting J.J. Bouma, M. van der Veen. References.

Decoding sustainability success: The role of environmental management accounting and environmental management initiatives under institutional pressure.

Foreword Preface Acknowledgments List of Contributors List of Figures List of Tables PART I: Introduction and Structure 1. Sustainable Supply Chain Management and Environmental Management Accounting Part II: Contemporary Issues 2. Life Cycle and Supply Chain Information in Environmental Management Accounting: A Coffee Case Study 3. Motivations Behind Sustainable Purchasing 4. An Input-output Technological Model of Life Cycle Costing 5. Farm Risk Management Applied to Sustainability of the Food Supply Chain: A Case Study of Sustainability Risks in Dairy Farming PART III: Social Issues 6. Companies, Stakeholders and Corporate Sustainability - Empirical Insights from Hungary 7. Corporate Social Responsibility and Competitiveness - Empirical Results and Future Challenges 8. Social Impact Measurement: A Classification of Methods PART IV: Economic Issues 9. New Decision Method for Environmental Capital Investment 10. Carbon Accounting in Greek Companies Participating in the European Union's Emissions Trading Scheme: Current Practice and Projected Financial Implications 11. Environmental Management Accounting: Comparing and Linking Requirements on the Micro and Macro Level - A Practitioner's View PART V: Other Issues 12. The Benefit Side of Environmental Activities and the Connection with Company Value 13. Implementation of Water Framework Directive Obligations in Hungary: Estimating Benefits of Development Activities in Two Pilot Areas 14. Health, Safety and Environmental Costs and Chemical Selection in the Oilfield Industry: A Method for Informed Decisions During Project Planning 15. Sustainability Management Control 16. Impact Assessment in the European Union: The Example of the Registration, Evaluation and Authorisation of Chemicals (REACH) Index

The consequences of the global climate change and degradation of ecosystems have created a tendency for the hotel industries to adopt and implement cleaner and safer environmental practices to their business operations. Since Environmental Management Accounting (EMA) has been witnessed around the globe as an effective tool which directs an organization to achieve the goals of sustainability, this study is designed to examine how EMA can be used as a tool to assess a hotel’s impact on the environment and its contribution towards the Triple Bottom Line (TBL). To proceed the study, a qualitative approach is adopted using a case study method. Since Environmental Management Accounting and sustainability accounting are broader concepts, an in-depth analysis was undertaken in an environmentally friendly hotel in Sri Lanka. The data collection process was mainly done using semi structured interviews as well as non-participative observations and document analysis. The findings of this study reveal that even though hospitality industries in the developing countries lag behind the commitments to the concepts such as sustainability and Environmental Management Accounting, the selected hotel has implemented EMA techniques and practices to a greater degree of success. This greater adoption of EMA practices has not only ensured effective use of energy and water sources, improved employee and customer satisfaction, ensured compliance with legal requirements but also paved the way to gain a competitive position in the market place as a brand that upholds the green visionary and sustainability as their main strategic imperative.

This paper reports and analyses the results of a trans-European project to investigate the present and potential future links between the environmental management and management accounting functions of a company or business. A taxonomy of four broad but distinct approaches to environmental accounting is identified from the literature: external financial reporting; social accountability reporting; energy and materials accounting; and environmental management accounting. This project focuses on the latter the generation, analysis and use of financial and related non-financial information, in order to support management within a company or business, in integrating corporate environmental and economic policies and building sustainable business. The research involved interviews with accountants1 and environmental managers at eighty-four companies in Germany, Italy, The Netherlands and the UK, and detailed case studies of fifteen companies in those four countries. The paper summarizes the findings of the research and their implications for four core hypotheses, goes on to discuss international differences, and concludes by reviewing the implications of the results for likely future developments.

Sustainable Balanced Scorecard (SBSC), Organizational Sustainability Performance Index (OSPI), and Corporate Sustainability Index (ISE) are all tools that help organizations measure and manage their sustainability performance. SBSC integrates sustainability considerations into traditional performance management systems, while OSPI and ISE provide sustainability performance benchmarks for organizations to assess their sustainability performance and identify areas for improvement. These indicators reflect a growing emphasis on measuring and managing sustainability performance in organizations and are likely to become increasingly important as stakeholders demand more transparency and accountability in sustainability reporting. Sustainable Management System (SMS), Environmental Management Accounting (EMA), Sustainability Management Accounting (SMA), and the Composite Index of Sustainable Development (ICSD) are all indicators that reflect the growing emphasis on sustainable practices and accounting frameworks in today’s business and economic. SMS helps organizations integrate sustainability considerations into their operations, while EMA and SMA provide tools for identifying and measuring the environmental and social costs and benefits of business activities. ICSD measures a country’s progress towards sustainable development based on various economic, social, and environmental indicators. These indicators suggest a growing recognition of the importance of sustainability in economic development and decision-making processes, and are likely to become increasingly important as organizations and governments continue to prioritize sustainability.

This study investigates how South African hotels incorporate smart technologies into Environmental Management Accounting (EMA) practices to enhance environmental accountability and sustainable management. Owing to the high consumption of energy, water, and other natural resources, the hospitality industry is under increasing pressure to reduce its environmental footprints. The EMA offers a mechanism for hotels to embed sustainability into their decision making. However, the integration of EMA with digital technologies remains underexplored in South Africa, an emerging economy. A qualitative multiple-case study design was employed, involving 27 semi-structured interviews with key hotel stakeholders across 3–5-star hotels in the KwaZulu-Natal and Gauteng provinces. Thematic analysis guided the identification of patterns and themes. The findings revealed that digital tools, such as Internet of Things (IoT) sensors, building management systems, and real-time dashboards, are increasingly being used to monitor environmental performance. When integrated with operational and financial workflows, these tools enhance decision making, reduce costs, and promote a sustainable culture. However, limited interoperability with legacy systems, high implementation costs, and insufficient technical expertise have been identified as the key barriers. Smart technologies have the potential to transform the EMA in the hotel sector, but their success hinges on organisational alignment, skill development, and supportive governance structures.

The Asia Pacific region is the fastest-growing source of greenhouse gas emissions and natural resource consumption. The impact of climate change and rapid natural resource consumption is visible in the region. Significant droughts and floods have caused serious disruption and volatility in these economies. Sustainability challenges contribute to high material costs, high transportation costs, and rising energy and commodity prices. There is a risk that the Asia-Pacific region is consuming more resources than its ecosystems can replenish, threatening the region’s self-sustaining mechanisms. Companies operating in the Asia-Pacific region experience sustainability-related problems without recognizing potential opportunities of sustainability management. In particular, local sustainability challenges in the region require different sustainability management approaches to minimize environmental degradation, carbon impacts and social impacts. To develop operational and strategic approaches, how and to what extent do environmental and sustainability management accounting (EMA) practices contribute to sustainability management? Also, what are the effects of sustainability management and integrated reporting in the Asia-Pacific region?

Foreword: Susan McLaughlin, US EPA, William Blackburn, Baxter International, Ian Ash, BT Corporate Communications, Jan-Olaf Willums, Storebrand, Norway and Jacqueline Aloisi de Larderel, UNEP IE Introduction: Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK Part One: General Concepts 1. The Green Bottom Line Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK 2. An Introduction to Environmental Accounting as a Business Management Tool: Key Concepts and Terms US Environmental Protection Agency 3. Calculating the True Profitability of Pollution Prevention Stefan Schaltegger, University of Basel, Switzerland, and Kaspar Mueller, Ellipson Ltd, Basel, Switzerland 4. Integrating Environmental Impacts into Capital Investment Decisions Marc J. Epstein, INSEAD, Fontainebleau, France, and Marie-Josee Roy, Ecole Polytechnique de Montreal and CIRANO, Canada 5. Valuing Potential Environmental Liabilities for Managerial Decision-Making: A Review of Available Techniques US Environmental Protection Agency 6. The Italian Method of Environmental Accounting Matteo Bartolomeo, Fondazione Eni Enrico Mattei, Milano, Italy 7. Environmental Management Accounting in the Netherlands Jan Jaap Bouma, Erasmus Centre for Environmental Studies, Rotterdam, Netherlands 8. Cost Allocation: An Active Tool for Environmental Management Accounting? Roger L. Burritt, The Australian National University, Canberra, Australia Part Two: Empirical Studies 9. Green Ledgers: An Overview Daryl Ditz, Janet Ranganathan and R. Darryl Banks, World Resources Institute, Washington, DC, USA 10. Environmental Cost Accounting for Chemical and Oil Companies: A Benchmarking Study David Shields, Beth Beloff and Miriam Heller, University of Houston, USA 11. Applying Environmental Accounting to Electroplating Operations: An In-Depth Analysis Mark Haveman and Terry Foecke, Waste Reduction Institute for Training and Applications Research, St Paul, MN, USA 12. Reducing the Uncertainty in Environmental Investments: Integrating Stakeholder Values into Corporate Decisions Graham Earl, Tuula Moilanen and Roland Clift, University of Surrey, UK 13. Shared Savings and Environmental Management Accounting: Innovative Chemical Supply Strategies Thomas J. Bierma, Frank L. Waterstraat and Joyce Ostrosky, Illinois State University, USA 14. Environmental Accounting in an Investment Analysis Context: Total Cost Assessment at a Small Lithographic Printer Edward D. Reiskin, Deborah E. Savage and David A. Miller, The Tellus Institute, Boston, MA, USA Part Three: Case Studies 15. Making Environmental Management Count: Baxter International's Environmental Financial Statement Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK 16. Full-Cost Accounting for Decision-Making at Ontario Hydro US Environmental Protection Agency 17. Environmental Accounting at Sulzer Technology Corporation Georg Schroeder, Sulzer Hydro, Zurich, Switzerland, and Matthias Winter, IMD, Lausanne, Switzerland 18. Life-Cycle Costing and Packaging at Xerox Ltd Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK 19. The Cost of Waste at Zeneca Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK 20.The Road Not Taken: Acting on 'Beyond Environmental Compliance' in Managerial Decision-Making Timothy T. Greene, Vanderbilt University, Nashville, TN, USA Part Four: Implementation 21. Implementing Environment-Related Management Accounting Martin Bennett, University of Wolverhampton, UK, and Peter James, Sustainable Business Centre, Congleton, UK