Filetype PDF | Posted on 19 Aug 2022 | 3 years ago
Authentication
digital resources
215x Filetype PDF File size 0.09 MB Source: store.ectap.ro
The Environmental Accounting:
an Instrument for Promoting the Environmental Management
Cleopatra ªendroiu
Ph.D. Senior Lecturer
Aureliana Geta Roman
Ph.D. Lecturer
Academy of Economic Studies, Bucharest
Abstract. Companies and managers usually believe that environmental costs are not significant to
the operation of their businesses. However, often it does not occur to them that some production costs
have an environmental component. By identifying and controlling environmental costs, environmental
accounting systems can help environmental managers to justify these cleaner production projects, and to
identify new ways of saving money and improving environmental performance at the same time.
Key words: ecological efficiency; environmental accounting; environmental costs; performance.
1. Introduction
A progressive environmental policy can contribute to The environmental accounting represents a method of
achieve the objective of the European Council of Lisbon of measuring the performance of any type of organization
turning the European Union into the most competitive (governmental departments, industrial producers, etc.) in
knowledge-based economy. If the development of a green relation to the environment and in economic terms. The
market can be sustained and encouraged, the businesses and environmental management accounting is a subsystem of
the citizens will respond with technological inventions and the environmental accounting, used in general to offer
with an administration that will determine the growth, the informational support for the decision-making process of
competitiveness, the profitability and the creativity of work. a company, even if the obtained information can be used
The leaders of the organizations and of the companies have for other purposes, too.
already integrated the principles of the sustainable At the level of an organization, the environmental
development into their business strategies. Solving the present accounting is used in order to identify measures that
environment problems requires a strategic approach, too promote the sustainable environmental management.
(besides a legislative approach), with the purpose of The implementation of measures that ensure a balance
introducing the necessary changes in production and between the decrease of the costs and the decrease of
consuming. It is absolutely necessary to optimally use a whole the impact on the environment is a crucial aspect for the
series of instruments and measures through which is influenced sustainable environmental management. The diagram
the decision making process of companies, consumers, citizens presents the general scheme of the environmental
and of the ones that adopt the policies from other fields. accounting (figure 1).
The Environmental Accounting: an Instrument for Promoting the Environmental Management
45
External Benefits
2. Assumed economic benefits 3. Benefits for the Clients
(Consumption of
electrical energy)
Ecological risks Environmental management Competitive
advantages
4. Benefits from the prevention 1. Effective economic benefits
of risks (respecting the
regulations, ecological
structures)
Theoretical and Applied Economics Internal benefits
Source: Toshiba Group (1999)
Figura 1. Environmental accounting – instrument for the management
2. Internal instruments of the environmental and have a major effect on the environment on the basis of
accounting the accounting system EcoBalance for each operation;
examining the alternatives for the improvement plans that
As internal instruments of the environmental have as purpose reducing the impact on the environment
accounting can be used, interdependently, the following: through rational, economic approaches; establishing the
the segments environmental accounting, the system of efficiency of each possible approach by using the segment
environmental accounting EcoBalance, the corporate environmental accounting, so that it is chosen the method
environmental accounting. that leads to the best results; measuring the economic
The segment environmental accounting is an efficiency of the activities of environmental protectioin and
instrument of the environmental accounting that allows the ecological efficiency of the activity of the company as
selecting an investment object, or a project connected to entity, by using the corporate environmental accounting.
the environmental protection from a series of projects or The first step in developing an environmental
operations carried out by the enterprise and the evaluation accounting system is connecting the environmental
of the effects on the environment for a certain period. The management to the financial accounting. This is realized
effect of the investment in the environmental protection by establishing the environment-related aspects of the
will be calculated on the basis of the concept “return on organization and by selecting the ones considered being
investment”. The calculation result is used internally for significant and about which the managers wish information.
the decision-making process in the sustainable These represent cost objects of the environment.
environmental management. The expression “environmental aspects” is defined as:
The system of environmental accounting EcoBalance: (a) Initiatives to prevent, reduce or remedy the harms
it is an internal instrument of the environmental accounting done to the environment or to preserve the recyclable and
that offers support for the activities of sustainable non-recyclable resources (such initiatives can be required
environmental management. All the processes and by the environmental laws or norms in force, or by contract,
operations are represented from the perspective of the or they can be carried out voluntarily);
environmental accounting, on the basis of the data (b) Consequences of breaking the environment laws
concerning the impact upon the environment valid for each and norms;
activity. (c) Consequences of the damage made to the
The corporate environmental accounting is an environment, to others or to the natural resources; and
instrument that allows presentation to the public of the (d) Consequences of the indirect obligations required
processed and compiled information. The data of the by law (for instance, obligations for the damage made by
EcoBalance system are turned to good account and there the previous owners).
are calculated (as quantities and values) the cost and the On the other hand, at the level of the financial
effect of the activities of preserving the environment, by accounting, the environmental aspects affect the financial
using indicators and formulas. situations under the following forms:
The process of processing the environment-related Introducing environmental laws and norms can lead
information in an organization will logically follow the next to asset depreciation and therefore, to the need to
major steps: identifying the processes that are expensive reduce their accounting value;
46
Failing to respect the legal requirements concerning principle and, as a consequence, it can affect the
the environment aspects, such as exhaust fumes or information presentation and the basis for drawing
deversarile de waste or changes in legislation with out the financial statements.
retroactive effect, can incur remedy costs, The identification of the significant environment-
compensation costs or legal costs; related aspects for the environmental accounting will
Some entities such as the ones from the extractive depend to a great extent on the purposes of the old system
industry (gas, oil or mining exploitations), chemical of evaluation of the environment aspects. A lot of
enterprises or recycling companies can create organizations have or are implementing environmental
obligations related to the environment as a direct management systems that point out the environment-
consequence of the carried out activities; related aspects of the companys activity and identify the
The implicit obligations incurred by a voluntary resources and the results obtained from those activities.
initiative; for instance an entity could have Still, the purpose of a management system that facilitates
identified the contamination of the soil and, without the environmental accounting can anyhow differ from the
any legal obligation, could have taken the decision model indicated by the international environmental
to remedy this problem, because it is preoccupied management standards, such as ISO 14001.
with its long-term reputation and its relation to the
community; 3. Environmental management indicators
An entity may need to present the existence of some
contingent/probable debts if the expenses The environmental management uses indicators to
concerning the environment aspects cannot be accurately evaluate the level of the sustainable
estimated reasonably; and management and to facilitate its subsequent improvement.
In extreme situations, non-observance of certain With this purpose, the indicators must be based on the
environment laws and norms can affect the following three reference elements as are shown in table 1,
continuity of an entity according to the continuity as the Toshiba Group (1999) used.
Environmental management indicators
Table 1
Element Explanation Quantification Ratios Meaning
a) Economic Shows how rational If this coefficient is higher than 1 (the
benefits of the from an economic point Economic benefits economic benefits are equal or higher than
activities of of view are the activities the environmental costs), then the
Costs of protecting the environment
preserving the of environmental sustainable management is considered being
environment protection. efficient.
If the presented indicator is higher than 1 (the
Economic benefits + Decrease of social costs economic benefits and the decrease of the
social costs equal or exceed the
Costs of protecting the environment
environmental costs), then the sustainable
management is considered viable.
Decrease of the ecological impact This indicator is used to evaluate the positive
evolutions in the efficiency of the investments
Costs of protecting the environment
and of other projects.
b) The ecological Shows if the ecological Sales This equation is used to evaluate if the
efficiency of the impact of the economic ecological impact corresponds to the
Total ecological impact (in quantitative or value units)
economic activities activities is acceptable dimensions of the business.
and if these activities Added value from economic activities The equation is used to establish if the profit
answer the social corresponds to the impact on the
Total ecological impact (in quantitative or value units)
requirements. environment.
c) Environmental It is used to establish if The internal audit, the local reports, the development
management the process of environ- processes of the ecological technology, ecological levels,
mental management is „green” acquisitions and other aspect are analyzed.
appopriate.
The environmental accounting must function as an managerial decision. The development and the permanent
instrument for the measurement of the economic efficiency improvement of the environmental accounting system
of the activities of environmental protection and of the represents an essential condition of the organizations
ecological efficiency of the activities. In this context, the sustainability, so that this one becomes, on one hand, an
objective of any Romanian organization should consists instrument that supports the decision-making process, and
in setting the ground for an environmental accounting on the other hand, an indicator for the sustainable
system that evaluates the sustainable environmental environmental management that accurately evaluates the
management and that offers support for assisting the activities of environmental protection. The Environmental Accounting: an Instrument for Promoting the Environmental Management
47
References
United States Office of Pollution EPA 742-R-95-001 Environmental International Conference Economic and Social Research Institute
Protection Prevention And Toxics Agency (MC 7409), (ESRI), Faculty of Environmental Studies, Nagasaki University
Washington (1995): An Introduction to Environmental (2005): New System of Integrated Environmental and Economic
Accounting As A Business Management Tool: Key Concepts Accounting (Trial Calculation on Hybrid Accounting System
And Terms integrating Environmental Pressures and Economic Activities)
United Nations Division for Sustainable Development - UNSD IASP 1010 International Statement on Audit Practice 1010
(2003): Handbook of National Accounting: Integrated Including the environmental aspects in the audit of the financial
Environmental and Economic Accounting — An Operational statements
Manual Toshiba Group (1999): Environmental Accounting,
www.toshiba.com
Theoretical and Applied Economics
48
no reviews yet
Please Login to review.
