# 9 Environmental management accounting

In this section you will delve into the topic of environmental management accounting (EMA), its significance in organisational decision making and the evolving role of management accounting.

Figure 14

As you have learned, management accounting serves as a crucial component to support managers in decision making within organisations. With the increasing awareness of the need for sustainable development, it’s important that management accounting adapts to address society’s expectations of organisations playing a role in the transformation towards sustainability. As Milne (1996, p. 136) noted, management accounting is ‘incomplete as generally practiced’ by neglecting the external effects of corporate activities.

Environmental management accounting (EMA) is a reflection of this evolution, as it recognises the interdependence between the environment and the economy and provides valuable insights into the environmental impact of organisational activities. By integrating environmental considerations into decision making, organisations can demonstrate their commitment to sustainability and contribute to the achievement of environmental goals.

EMA is an emerging aspect of management accounting that deals with the collection, analysis and presentation of environmental cost and information for internal decision-making purposes. By providing managers with a clearer understanding of the environmental aspects of their organisations, EMA contributes to a more sustainable and responsible approach to business operations.

Schaltegger and Zvezdov (2015, p. 1333) define EMA as:

> EMA is the subset of management accounting dealing with environmental issues and has been defined as the group of accounting methods and activities that support the collection, creation, analysis and communication of the necessary information to take decisions for dematerialization, environmental impact reduction and improved eco-efficiency (Herzig et al., 2012; Jasch, 2003; Schaltegger and Burritt, 2000).

OpenLearn - Fundamentals of cost accounting and environmental management accounting
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