Environmental management accounting ema is the scope

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Environmental management accounting (EMA) is the scope of environmental accounting able to interact with the CSR department in order to attend this demand for reliable information. Lucarelli (2003) affirmed that “Environmental Management Accounting (EMA) provides a more comprehensive approach to management accounting, with a particular emphasis on costs related to environmental issues and wasted raw materials”. Nowadays, this assumption is considered a “conservative” definition of EMA, considering wasted raw material are just a small part of the environmental impact caused by companies. Furthermore, Lucarelli (2003) also assumed that the development and achievement of environmental goals can
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Environmental accounting emergence and its relation to Corporate Social Responsibility FE7060 Environmental Economics and Investment, 2019 8 be reached only with the development and application of EMA by manufacturing companies. The International Federation of Accountants (IFAC 1998: paragraph 1) defines EMA as follows: “Environmental Management Accounting - the management of environmental and economic performance through the development and implementation of appropriate environment-related accounting systems and practices. While this may include reporting and auditing in some companies, environmental management accounting typically involves life-cycle costing, full cost accounting, benefits assessment, and strategic planning for environmental management”. From a private organisations’ perspective, a decade ago, EMA was responsible for providing limited non-monetary information related to the impacts of an organisation to the environment, such as, how much waste was disposed of, the waste treatment approach, risks faced due to a possible environmental accident, environmental risks analyses. However, considering the scale of the environmental world crises has taken, mainly linking the environmental problems to the industrial sector, EMA had to expand its coverage. Nowadays, EMA works to have precise figures classified in environmental benefits and costs (internal and external), impacts on environmental before, during and after the organisation process and take all these into account for the management reports. Subsequently, these management reports will serve as a basis to investments decisions, DSGs achievement level, external social reporting, business plan strategy and also for a taxes review planning. The most substantial challenge of EMA at the current stage is to convert all the environmental data to accountable figures, considering its complexity, and then be able to use it as part of the Financial Accounting System as well.
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Environmental accounting emergence and its relation to Corporate Social Responsibility FE7060 Environmental Economics and Investment, 2019 9 Considering that without accurate information is not possible to evaluate the current environmental stage as well as to implement and monitor a strategic plan to achieve the organisation environmental targets, EMA is essential for a CSR active development in an organisation.
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