Reduce Your Costs With Environmental Management Accounting


8 nov. 2013 (il y a 7 années et 11 mois)

489 vue(s)

Reduce Your Costs With
Environmental Management
Zero Waste Scotland
works with businesses,
communities, individuals
and local authorities to
help them reduce waste,
recycle more and use
resources sustainably.
For more information about Zero Waste Scotland’s
services and other publications that will help you,
please visit the website (
or contact the free Helpline on 0808 100 2040.
Scotland’s Zero Waste Plan and other legislation
require businesses and public sector bodies to
change the way they operate. Therefore, Zero Waste
Scotland has produced this good practice guide to
help accountants and finance professionals use
environmental accounting techniques as a means of
responding to these changes.
Environmental accounting techniques involve
identifying, analysing, managing and reducing
costs associated with raw materials, utilities,
services and waste, with the aim of saving
money and reducing environmental impact.
This guide offers practical advice and case
studies to help organisations review their
decision-making and information flows to
enable improved environmental performance
to become a key element of their strategy.
Some accounting professionals may believe
that resource efficiency is not their role, but
there are many reasons why the accounting
profession should get involved and these are
explained in this guide.
It should be noted that financial reporting of
environmental issues, such as liabilities or
costs arising from business activities, are not
The guide does cover the environmental
aspects of raw material waste, water,
energy, transport and the supply chain, and
explains aspects of various environmental
management initiatives.
Each section features details on:
likely environmental issues; and•
potential accounting responses in the short •
term and the long term.
By using this guide, accountants and financial
professionals will be better equipped to
provide advice to their clients and respond
effectively as Scotland moves towards
becoming a Zero Waste economy.
Section Page
1 Introduction 1
1.1 The business benefits of good environmental performance 1
1.2 Environmental accounting 1
1.3 The purpose of this guide 2
2 Environmental aspects and impacts of business 4
2.1 What is an environmental aspect and an environmental impact? 4
2.2 Why are these relevant for an accountant? 4
3 Raw material and waste 6
3.1 Business activities and environmental impacts 6
3.2 Legislation, regulation and public policy 8
3.3 Accounting responses 11
4 Water 13
4.1 Business activities and environmental impacts 13
4.2 Legislation, regulation and public policy 13
4.3 Accounting responses 13
5 Energy 15
5.1 Business activities and environmental impacts 15
5.2 Legislation, regulation and public policy 15
5.3 Accounting responses 17
5.4 Footprinting, offsetting and adaptation 18
6 Transport 19
6.1 Business activities and environmental impacts 19
6.2 Legislation, regulation and public policy 19
6.3 Accounting responses 19
7 Supply chain management 23
7.1 Introduction 23
7.2 Supply chain management, the environment and accountants 23
8 Other environmental management initiatives 27
8.1 Environmental management systems 27
8.2 Environmental reporting 29
8.3 Key environmental performance indicators 30
9 Further reading 33
1.1 The business benefits of good
environmental performance
Traditionally, most businesses’ main concern
for environmental issues has been to make
sure that they comply with all relevant
legislation and regulations that aim to reduce
and control pollution. This has usually been
of the traditional ‘command-and-control’
variety where the regulator sets rules and
issues permits, then checks to confirm that
businesses are complying. Where necessary,
the regulator then enforces these with
prosecutions, fines and improvement notices.
The responsibility in businesses for
compliance has usually been handled by:
specialists in environmental management;•
those responsible for health, safety and •
quality (for whom environment has been
‘added on’ to the job role); or
production manager/site manager/•
engineer-type roles – since most
regulation has traditionally been directed
at those sectors with obviously significant
environmental impacts such as heavy
Historically, there has been little obvious
role for accountants. However, this is
changing as environmental performance
is impacting many businesses in ways
beyond merely compliance with regulation.
These new pressures on businesses can
affect the business’s value far beyond the
occasional expense of permit fees and
fines. Environmental issues that can affect
businesses include:
Environment-related costs, which can •
increase faster than normal inflation. This
is partly due to taxes and other Government
policies which are deliberately designed
to achieve this effect, such as ‘green
taxes’. Even without this, environment-
related costs will still tend to rise faster
than average due simply to the usual laws
of supply and demand, as prices reflect
the increasing scarcity of environmental
Risks of environmental effects on a business •
such as water restrictions, oil shortages,
increased flooding or other severe weather
conditions. Costs associated with insurance
may rise.
Poor environmental performance can •
damage stakeholders’ perceptions of the
business and this can have a damaging
effect on reputation and image. These
include groups such as customers,
governments, staff, investors, press and
non-governmental organisations (NGOs),
all of whom can play an important part
in the business’s ongoing success. This
type of impression is not easy to quantify
but is increasingly important to monitor.
Conforming with the standards expected
by society can be seen as an implicit social
contract, and a form of unwritten ‘licence to
Many leading businesses are taking a
forward-looking approach to environmental
issues and are creating value by managing
environmental risks and opportunities. They
are thinking about how they can respond
to environmental issues in ways that can
improve performance and are considering
environmental issues in long-term decision-
making and strategy. As a result, they are
seeing financial and reputational benefits.
Ultimately, it is likely that most businesses
will have to make strategic changes to
maintain their competitive advantage in
markets where there is ever-increasing
attention on environmental issues such as
climate change. As well as making short-term
changes, businesses should be considering
the long-term risks and opportunities that
environmental issues present and focusing on
performance as well as conformance.
1.2 Environmental accounting
The term ‘environmental accounting’ can be
used to cover a range of different techniques
and activities. Most of these are ways of
adapting or extending conventional accounting
in one way or another to help businesses to
address the new challenges posed by the
environmental issue.
1 Introduction
Ultimately, it is
likely that most
businesses will have
to make strategic
changes to maintain
their competitive
advantage in
markets where
there is ever-
increasing attention
on environmental
issues such as
climate change.
2 3
External reporting by businesses on their
environmental performance is the most
obvious environmental accounting activity
since, by definition, this is already in the public
domain. External environmental reporting is
touched on briefly in section 8 of this guide,
but the main focus is on the use of accounting
information and techniques to support
management, known as ‘environmental
management accounting’ (EMA).
Environmental resources have not traditionally
been recognised explicitly as assets in the
same way as man-made items such as
buildings, plant and equipment, since they
have always been assumed to be indefinitely
available in unlimited quantities. However,
it is now coming to be recognised that
environmental resources are finite and,
therefore, just as scarce and valuable as
assets legally owned by a business.
There are several ways in which accountants
can adapt their existing skills and usual job
responsibilities to help their businesses to
deal with environmental issues and, in many
ways, accountants are in a position to make a
unique contribution. However, if this role is not
taken on by accountants, it could instead be
filled by others.
Accountants have a direct interest in
controlling and reducing business costs and
increasing profits. They have the necessary
skills and experience to:
monitor, measure and control costs;•
manage information systems so that the •
outputs are accurate and reliable;
identify and plan financial budgets for •
improvement projects;
help to formulate and implement strategy; •
provide highly regarded advice.•
Environmental management accounting offers
an opportunity for accountants to develop
the services they offer beyond the traditional
core activities. Two accounting skills are
particularly relevant here:
costing – it is essential that the •
environmental costs of products and services
are understood and allocated properly so
that they can be managed and prices can be
set at an appropriate level; and
investment appraisal of projects – •
accountants have an important role to play
in ensuring that all relevant environmental
costs are considered in project proposals.
A small number of products often generate a
disproportionate share of total environmental
costs. The problem is that environmental
costs frequently get ‘hidden’ as overheads
and allocated inappropriately. Treating
environmental costs as a general overhead
rather than allocating them to individual
products leads to some products appearing
to have higher costs than is actually the case,
while other products appear to be cheaper
to produce than they really are. Accountants
have the skills and experience to determine
the true value of environmental costs.
This problem also applies to many other types
of cost. The technique of activity-based costing
(ABC) develops a detailed understanding of
costs and identifies cost drivers that reflect
the links between causes and effects, and
then uses this information to recalculate the
costs of products, processes and services.
This approach shares many similarities with
the techniques described in this guide.
Many businesses do not fully understand the
implications of environmental factors on their
operations – often because the accountants,
environmental managers and others with
relevant information are seldom brought
together to consider the matter. Applying
environmental management accounting
techniques gives businesses an opportunity
to take a more strategic view of how current
and future environmental factors might affect
a business’s short-term profits and long-term
competitive advantage.
In searching for ways to deliver quality
products and services to customers using
fewer materials and utilities, businesses
Accountants can
adapt their existing
skills and usual
job responsibilities
to help their
businesses to deal
with environmental
issues and, in many
ways, accountants
are in a position
to make a unique
may also find better design and distribution
solutions that result in cost savings and an
improved reputation.
To keep this Guide focused on what is most
likely to be immediately relevant for most
businesses, it does not attempt to cover:
financial reporting of other environmental •
issues such as provisions made for
environmental liabilities such as
contaminated land
; and
societal costs or other costs to the •
environment that are external to a business,
but may arise partly because of its activities
such as acidification of lakes due to air
1.3 The purpose of this guide
This guide aims to help accountants and
financial managers in businesses and in
practice to use environmental management
accounting techniques to:
identify and analyse materials, utilities and •
waste costs to help the business to:
make informed decisions about operating –
costs; and
identify priority areas for cost-effective –
environmental improvement and
increased profitability;
allocate environmental costs to different •
processes to help stimulate process
improvements and cost-saving projects;
compare the environmental costs of •
different products and services to identify
areas of the business for future expansion
and stimulate cleaner design projects;
incorporate environmental considerations •
into decisions about investment in new
technology and equipment; and
enhance team working between accountants •
and non-financial managers.
The techniques described in this guide are
applicable to all sizes and types of business
in all sectors including the private sector, the
public sector and not-for-profit organisations
such as charities. However, for simplicity and
brevity, the term ‘business’ is used in this
guide to refer to all types of organisation.
This guide is intended to provide practical
guidance for accountants that can be applied
directly and immediately.
Section 2 explains how a business can have
environmental impacts, and how these can be
linked to adverse business impacts and to the
role of an accountant.
Sections 3–7 are intended to help accountants
gain an understanding of the areas of waste,
water, energy, transport and supply chain
management, and of how environmental
management accounting techniques can be
used to a business’s benefit.
Section 8 outlines other environmental
management initiatives, such as
environmental management systems,
environmental reporting and key performance
The treatment of contaminated land in financial reporting is addressed by financial reporting standards FRS12 in the UK and
IAS37 internationally.
This guide is
intended to provide
practical guidance
for accountants
that can be applied
directly and
4 5
2.1 What are environmental aspects and
An environmental aspect is an:
‘Element of an organisation’s activities,
products or services that can interact with the
Whereas an environmental impact is:
‘Any change to the environment, whether
adverse or beneficial, wholly or partially
resulting from an organisation’s activities,
products or services’
Once the most significant environmental
impacts and associated business costs
have been identified, it is recommended
that a business analyses these areas for
opportunities for environmental improvement
and cost savings.
Fig 1 shows some common examples of
environmental aspects and impacts that
accountants may observe at their place of
2.2 Why are these relevant for an
The impact of environmental matters on
business performance is increasing and will
continue to do so. From Fig 1, it can be seen
that there can be many potential effects on a
business as a result of environmental impacts.
By identifying a business’s environmental
aspects and impacts, an accountant can gain
a clearer picture of their significance and how
his/her business may be affected.
Although Fig 1 shows a single impact for
each aspect, it should be noted that some of a
business’s activities can often each have more
than one environmental impact. For instance,
the use of electricity from non-renewable
resources impacts on the environment
through air pollution and its contribution to
climate change. It is important for a business
and its accountant to realise this and also
that a single environmental impact can often
result from several different environmental
aspects of a business, potentially increasing
the overall significance of that impact.
This significance can range from a minor
short-term business effect (e.g. non-
compliance, financial penalties and additional
waste-disposal costs) to more serious long-
term business effects (e.g. negative public
relations and lack of investment) that can,
ultimately, threaten the business’s survival.
By using the environmental management
accounting ‘responses’ suggested in sections
3–7, a business can identify its environmental
aspects and associated environmental
impacts as shown in Fig 1, and control their
potential effects.
2 Environmental aspects and
impacts of business
These definitions are according to ISO 14001.
Potential effects
on business
to climage
fines and
liability and
stakeholders in
the business
corporate risk
financial costs
to business
public image
and damaged
Water consumption Use of renewable resource
Water treatment Use of non-renewable
Effluent generation and
Climate change from energy
intensive treatment
Drainage systems Flooding and damage to
Recycled process water (e.g.
closed-loop systems)
Conserves non-renewable
and renewable resources
Use of fossil fuels (e.g.
private car, company fleet)
Use of non-renewable
Use of biofuels Conserves non-renewable
Noise and vibration from
vehicle movements
Nuisance to local residents
and wildlife
Emissions from fuel use
(e.g. private car use)
Global climate change and
air pollution
Video and teleconferencing
services use
Reduced greenhouse gas
emissions to atmosphere
Electricity use (from fossil
fuels such as petrol and coal)
Air pollution and contribution
to climate change
Renewable energy use (e.g.
wind or solar)
Reduced contribution to
climate change
Natural gas use Use of non-renewable
Biofuel use Conserves non-renewable
Hybrid vehicle use Conserves non-renewable
Use of renewable
Paper consumption
and waste
Typical environmental

Typical environmental
Use of non-renewable
Packaging (e.g. plastic,
wood, cardboard)
Carbon emissions from
transport of materials
Raw material use
Refrigerant gas
consumption and emissions
Depletion of ozone layer/
climate change contribution
Reuse of packaging
Conserves non-renewable
Solid landfill waste
Greenhouse gas emissions
from transport and disposal
Recycled or reused
waste materials
Conserves non-renewable
Use of hazardous
Human health impact and
potential pollution
Visual impact on
Hazardous waste
Pollution of land through
disposal to landfill
Fig 1 Potential effects on business as a result of environmental impacts
6 7
3.1 Business activities and environmental
Wastes have several impacts on business
costs and the environment, including:
income, through a combination of lost raw •
materials and the cost of disposal;
the transport, storage and handling of •
wastes consume labour resources and incur
additional costs;
potential for penalties and fines for •
breaches of compliance (e.g. pollution
loss of land resource through increased •
requirements for landfill space; and
generation of methane, a potent greenhouse •
gas that is generated as wastes biodegrade.
A ‘waste hierarchy’ of approaches can be
defined. In order of preference, these are
shown in Fig 2.
3.1.1 Industrial symbiosis
Industrial symbiosis is an association between
two or more businesses in which the wastes
of one become the raw materials for another.
This type of industrial synergy provides
commercial and environmental benefits, and
can involve considerable creativity in devising
novel uses for wastes. Examples include:
reusing the waste sand that foundries •
generate in large quantities as a surface for
horse racing tracks;
reusing large wooden drums, which a •
cable business was previously disposing
of to landfill, in schools and youth groups
as tables on theatre sets and for display
crushing waste from ceramics •
manufacturers and using it as a highly
durable and decorative aggregate for
landscaping and footpaths;
3 Raw material and waste
Fig 2 The waste hierarchy
Prepare for reuse
Recover other value
On average,
the true cost of
wasted materials
is about ten
times the cost of
Disposal costs
Visible costs
Invisible costs
Lost materials
Lost labour
Energy costs
Other costs
Liabilities and risks
converting food wastes into a fuel vapour, •
similar to natural gas, which was used to
produce energy for sale to an electricity
supply company;
redistributing other food wastes to charities •
and community organisations (e.g. hostels
and day centres); and
arranging a supply of wood waste for a •
propagator of garden plants who used it to
generate heat for winter propagation in the
These arrangements have helped to:
reduce wastes going to landfill;•

reduce the use of environmentally sensitive •
resources, including fossil fuels and,
therefore, CO
emissions; and
reduce costs for the businesses using •
the wastes and generate an extra income
stream for those creating them.
3.1.2 Wasted materials – the true cost of
Wasted materials are expensive – they cost UK
industry at least £15 billion/year. Minimising
the amount of wasted material is an
extremely effective way of improving resource
productivity. However, half of all businesses
do not know how much waste they dispose of
each year.
When including the hidden costs of wasted
materials (e.g. energy, labour and other added
value costs), the true cost of wasted materials
is typically between 5 and 20 times the waste
disposal costs.
Fig 3 The true cost of waste
Half of all
businesses do not
know how much
waste they dispose
of each year.
Minimising waste in offices
Most office workers find that they can reduce
their waste costs by around 20% through no-
cost and low-cost measures. It is estimated
that the average office worker uses up to
45 sheets of paper per day (10,000 sheets
per year) and half of this is wasted. A best-
practice small office can use as little as 3,500
sheets of paper per person per year – this is a
useful guide when setting targets.
8 9
3.2 Legislation, regulation and public policy
The EU, UK and Scottish Governments have
published a number of policies and have
implemented several changes in legislation
and regulations that aim to reduce the UK’s
waste, specifically:
Environmental Protection Act 1990;•
EU Waste Framework Directive 2008;•

EU Landfill Directive 2000;•

Scotland’s Zero Waste Plan;•

Landfill Tax;•

Producer Responsibility legislation; and•
Waste Information (Scotland) Regulations.•
For more information on the legal aspects
of waste generation, storage, transport and
handling, and treatment/disposal, visit
3.2.1 Environmental Protection Act 1990
The Act places on all businesses that
generate wastes a legal duty of care for those
wastes and requires them to:
store and dispose of all waste responsibly;•

ensure that waste is handled or dealt with •
only by registered waste contractors –
people or businesses that are authorised to
do so; and
keep records for at least two years of all •
waste that is transferred to registered waste
3.2.2 EU Waste Framework Directive 2008
This revised Directive establishes the
legislative framework for the handling of
waste in the EU. It sets out requirements in
relation to waste management and planning
to limit the generation of waste, and to
optimise the organisation of waste treatment
and disposal. The Directive:
sets new recycling targets to be achieved •
by EU member states by 2020, including
recycling rates of 50% for household and
similar wastes, and 70% for construction
and demolition waste;
strengthens provisions on waste prevention •
through an obligation for member states
to develop national waste prevention
programmes, and a commitment from the
EC to report on prevention and set waste
prevention objectives;
sets a clear, five-step ‘hierarchy’ of waste •
management options, which has prevention
as the preferred option, followed by reuse,
recycling and recovering other value – with
safe disposal as the last recourse; and
clarifies a number of important definitions, •
such as recycling, recovery and waste itself.
In particular, it draws a line between waste
and by-products, and it defines when waste
has been recovered enough – through
recycling or other treatment – to cease
being waste.
3.2.3 EU Landfill Directive 2000
The Directive aims to prevent or reduce, as far
as possible, negative effects of landfill on the
environment, in particular the pollution of:
surface water;•


air; and•

the global environment.•
This Directive does not directly affect waste-
generating businesses, but has an indirect
effect by increasing landfill operators’ costs.
This will then be reflected in the charges they
make to waste generators and is intended to
put pressure to encourage waste reduction on
governments at national and local levels.
3.2.4 Scotland’s Zero Waste Plan
Scotland’s Zero Waste Plan sets out the
Scottish Government’s vision for a zero waste
society. The vision describes a Scotland
where all waste is seen as a resource, waste
is minimised, valuable resources are not
A waste consignment note is required for special waste. This must be kept for three years.
Scotland’s Zero
Waste Plan sets
out the Scottish
Government’s vision
for a zero waste
disposed of in landfills and most waste is
sorted, leaving only limited amounts to be
To achieve this vision, the Plan sets out radical
new measures, including:
landfill bans for the following specific waste •
dry recyclables and food waste by April –
2015; and
a complete ban on biodegradable waste by –
April 2017;
separate collections of specific waste types, •
including food;
segregating dry recyclables and food waste •
at source by April 2013;
two new targets that will apply to all waste •
by 2025: 70% recycled and maximum 5%
sent to landfill;
restrictions on the input to all energy-from-•
waste facilities;
improved information on different waste •
sources, types and management to highlight
further economic and environmental
measuring the carbon impacts of waste to •
prioritise the recycling of resources that
offer the greatest environmental and climate
change outcomes; and
a change in emphasis from ‘domestic’ •
towards ‘business’ waste streams.
3.2.5 Landfill Tax
The Landfill Tax was introduced by the UK
Government to:
help reduce the amount of waste being •
promote reuse and recycling; and•

provide funding for research into more •
sustainable ways of managing waste.
It is a tax directly on landfill site operators,
which they then pass on to their waste-
generating clients, thus increasing their costs.
Landfill Tax rates from 1 April 2011 are:
Standard Rate of £56/tonne for all ‘active’ •
waste; and
Lower Rate of £2.50/tonne for all ‘inactive’ •
(inert) waste.
VAT is also applied to the total disposal cost,
including the Landfill Tax component.
In accordance with the Government’s ‘Landfill
Tax Escalator’ policy, the amount by which the
Standard Rate will increase has been set at £8
per tonne per year, so that the rate in 2014/15
will be £80.
Further information on the Landfill Tax can be
found on the Business Gateway website
3.2.6 Producer Responsibility legislation
The principle of producer responsibility is
that a manufacturer’s responsibility for its
products should not end when it delivers the
finished product to its customer, but should
extend to the end of the product’s life when it
becomes waste.
Design for environment covers waste aspects


electrical equipment; and•

One reason for governments to introduce
Producer Responsibility legislation is to
encourage manufacturers to pay more
attention to the long-term effects of their
products at the end of their useful lives, at
the stage when they originally design their
products. This can give an advantage to
traditional materials such as metals and
natural textiles in preference to some plastics.
10 11
There are two areas where Producer
Responsibility regulations have already been
implemented into law in the UK:
packaging; and•
electrical and electronic products.•
Producer Responsibility Obligations
(Packaging Waste) Regulations 2007
Businesses that handle more than 50 tonnes
of packaging in a year and have a turnover of
more than £2 million are required to comply
with the Producer Responsibility Obligations
(Packaging Waste) Regulations 2007. These
Regulations require businesses to:
register with the environmental regulator; •
recycle and recover certain amounts of •
packaging waste.
Waste Electrical and Electronic Equipment
(WEEE) Regulations
Businesses that need to comply with
the WEEE Regulations are those that
manufacture, export, import, distribute
and treat and/or dispose of electrical and
electronic equipment.
Each of these businesses will have different
requirements determined by the Regulations.
Business users of electrical or electronic
products must ensure that WEEE is separated
from other waste, keep records of their wastes
and ensure that it is disposed of properly.
This can, of course, be through the take-back
systems provided by the manufacturers and
Further information on both schemes is
available from the Business Gateway website
3.2.7 Waste Information (Scotland)
Regulations 2010
These regulations were introduced in January
2011 and make it a legal requirement
for businesses to provide the Scottish
Environment Protection Agency (SEPA) with
waste data if requested to do so. Failure to
provide these data is an offence and could
lead to a fine not exceeding £5,000. Visit
made for more details about the Regulations.
Asset recovery at Dell
Dell is one of a growing number of high-tech
companies that are offering their customers
an ‘asset recovery’ service under which the
original supplier of equipment will take it
back at the end of its life.
Dell collects unwanted computers and
related equipment from its customers’
premises (what it is prepared to collect
is not limited to its own products). The
company then makes the items safe
technically by overwriting readable hard
discs and other technical processes to
protect the confidentiality of customers’
data. Then, depending on the item involved
and the customer’s preference, Dell will
sell the item(s) on behalf of its customer,
donate it to a charity for disabled and
disadvantaged children or dispose of it in an
environmentally responsible manner.
Dell claims that, since it introduced this
service, it has recycled millions of units
and that only about 1% of used computer
equipment that it has collected has ended
up in landfill.
Dell claims that,
since it introduced
this service, it has
recycled millions of
units and that only
about 1% of used
computer equipment
that it has collected
has ended up in
3.3 Accounting responses
How much waste reduction is worthwhile
depends on the particular business and what
it does. However wastes, and opportunities to
reduce them, are universal to some extent in
all businesses.
3.3.1 Short-term cost management
Simple direct actions can often achieve much,
even before any help from the accounting
system. For example, empty a waste skip
before it is disposed of and segregate its
contents into different categories (e.g. metals,
plastics, paper). Each category can then be
weighed and its source within the business
identified. Rough estimates of the costs of the
materials being discarded can then be made.
Photographs of waste and where it is being
produced can also help to highlight problem
areas, and convince others of the need for
action and allow for future comparisons.
3.3.2 Accounting systems
Accounting systems can be used to draw
attention to the full costs of wastes, though
this may often require some adaptation, since:
Waste disposal costs are often aggregated •
into accounting codes that also include
other, quite different, items under a general
code for ‘building management costs’ or
similar, and so may not be transparent to
decision makers.
Even when waste disposal costs are posted •
to their own code, this is usually accounted
for as a general overhead and either:
written off against a central budget; or–
if recharged to individual cost centres, –
then this is often done only on a general
basis of apportionment that would not
reflect which centres were creating the
most wastes in the first place.
Allowances are sometimes built into •
budgets and standard costs for ‘normal
losses in production’. Although this is
pragmatic and realistic, it also sends an
unfortunate signal that a certain level of
wastage is expected and tolerable.
These limitations can be addressed by
considering the design of accounting codes,
and regularly reviewing the allowances made
in budgets and standard costs for ‘normal’
rates of wastage, and asking whether these
are still appropriate or should be reduced.
3.3.3 Long-term decisions and strategy
Ensure that occasional major decisions •
with long-term effects such as redesigning
products and processes are supported
by analyses that include estimates of the
wastes that these will create, at realistic
predictions of future costs.
Remember that product design (which •
includes packaging) can affect the wastes
that the business’s customers will eventually
have to dispose of. Make sure that product
designers are made fully aware of disposal
costs and take these into account, and
have appropriate performance indicators
to guide the design process. A business
with a demonstrable superiority over its
competitors in this respect may be able to
create competitive advantage by using this
as a selling point.
The accountants of businesses that •
are affected by producer responsibility
legislation should also consider whether
provisions for end-of-life costs are needed.
3.3.4 Mass balances
A mass balance is a quantitative account
that shows where resources such as raw
materials, water and energy enter and leave
a business, and where within the business
they are used. It typically contains information
about the amount (e.g. volume, weight) used
by each main area or process and, in some
instances, can be very detailed. Presenting the
mass balance as a diagram makes it easy to
understand and use as a management tool.
International Federation of Accountants
The IFAC International Guidance Document
on Environmental Management Accounting
(EMA) presents a method of cost analysis that
aims to link together physical and monetary
Simple direct actions
can often achieve
much, even before
any help from the
accounting system.
12 13
measures of performance. The results
generated by this method represent attention-
directing information which highlights the
high proportion of the total costs incurred by
many businesses that end up as wastes.
The IFAC method includes in its definition
of ‘environmental cost’ not only the costs of
disposal of wastes, but also the original costs
of the original raw materials plus the costs of
other resources (e.g. labour and overheads)
that have been incurred up to the point at
which the waste is created.
For further information visit the IFAC website
Similar projects include ‘lean manufacturing

where multi-disciplinary teams consider
process steps, including costs and where
actual value is added to (or drained from) the
process flow.
Visit for more information on
‘lean’ thinking.
Materials flow cost accounting (MFCA)
MFCA is another application of the mass-
balance principle. An MFCA analysis aims to
analyse flows of materials and energy inside
a business. In essence, it can be seen as a
particularly detailed and in-depth application
of traditional process costing techniques.
However, unlike traditional process costing,
the primary aim is not to calculate product
costs, but to identify losses in production
by analysing physical flows and the costs
associated with them to identify opportunities
for improvements in cost efficiency and
environmental performance.
MFCA requires that the business already has
a production information system that collects
data in considerable detail for each stage of
the process. It was originally designed for
large manufacturers that already had an
Enterprise Resource Planning (ERP) system,
such as those developed by SAP or Oracle,
and can be seen as effectively an optional
add-on module to the ERP. However, this is
not essential and smaller businesses without
such sophisticated systems can also benefit
from simpler applications of MFCA.
A guideline on MFCA (ISO 14051) has recently
been developed for inclusion in the ISO 14000
Or simply ‘lean’ if applied to non-manufacturing organisations.
4.1 Business activities and environmental
Water is an increasingly expensive resource
with mains, sewerage and trade effluent
charges rising, so there are several water
issues that can affect business costs. For
treating and pumping incoming water •
supplies, and outgoing effluents and
sewage, requires significant energy
consumption; and
climate change is likely to mean more •
volatility and extremes of droughts and
floods, and changing weather patterns
(hotter drier summers and warmer wetter
Nearly all businesses have to pay for actual
water usage, measured by meters. This
should create a financial incentive to be
water-efficient but, outside water-intensive
sectors such as foods and metals, water has
not been a major cost for most businesses.
Many businesses do not always appreciate the
full costs of water use. Firstly, water is paid for
not once, but twice – first to purchase, then
again to dispose of as effluent. Other costs
associated with water consumption include:
Energy used to heat or cool water.•

Meter charges. Water supply companies •
decide what meters to provide to their
customers based on an estimate of their
likely consumption and charge a rental
based on the size of the meter that is fitted.
Businesses with meters that are larger than
necessary will be charged more than they
need to be.
The costs of materials or products lost in •
waste water (e.g. metals lost by poor control
at electroplating facilities).
Pumping, storing and additional treatment •
It has been calculated that many businesses
can save up to 30% of their water costs by
implementing simple and inexpensive water
minimisation measures and that, for those
businesses using water in their production
processes, this could represent 1% of
4.2 Legislation, regulation and public policy
The Water Services (Scotland) Act 2005
came into force in April 2008 allowing
Scottish businesses to choose their water
and wastewater supplier. This provided
Scottish businesses with the opportunity to
take advantage of reduced prices by switching
supplier. Visit for
more information.
The Water Environment (Controlled
Activities) (Scotland) Regulations bans
controlled activities including operating
certain types of weirs, abstracting and
impounding water, and dredging without
authorisation. The regulations set out general
binding rules for these activities. Visit for more detailed
4.3 Accounting responses
Businesses vary widely in how water intensive
they are, and this will determine how far it is
worth going to reduce water consumption.
However, all businesses consume at least
some water and there are many simple things
that most can do to reduce their water use
without requiring significant investment or
complex analysis.
The accountant’s basic responsibility, as
always, is to make sure that adequate and
reliable information is available to draw
management’s attention to excessive
consumption and the potential opportunities
to reduce this. Some actions that accountants
can take to support their businesses in this
are suggested below.
4.3.1 Short-term cost management
Review bills regularly and compare these •
against water meters to avoid over-
Install sub-meters to measure exactly where •
in the business water is being consumed.
Read meters regularly and monitor the •
Business Gateway – benefits of using water efficiently
4 Water
14 15
amounts over time to identify usual usage,
leaks, etc.
Review the Government’s list of the water-•
saving equipment that is covered by the
Enhanced Capital Allowances (ECA) scheme
(see the Water Technology List at and section
4.3.2 Accounting systems
Make sure that the accounting codes •
capture and record costs in the most
appropriate way to support subsequent
reporting and cost analyses. In particular,
make sure that there is a separate code for
water costs so that this is not aggregated
with other items, and record charges
separately for incoming water supplies and
Record charges for water that are based •
directly on consumption separately from
other parts of the total cost such as
standing charges.
Where possible, set up fields in accounting •
codes to record physical quantities as well
as financial costs.
4.3.3 Long-term decisions and strategies
When new buildings are designed or existing •
buildings are refurbished, make sure that
projected water consumption is considered
as part of the investment appraisal process.
Look for opportunities to incorporate water •
efficiency features in new or refurbished
buildings, for instance:
‘closed loop’ water cycles;–
rainwater capture;–
mains-fed water dispensers;–
dual-flush toilets; and–
self-stop taps.–
Many businesses can dramatically reduce
their water costs by making simple changes
in operating practices or maintenance
Visit the Business Gateway website
( for further information
about water legislation and business
5.1 Business activities and environmental
Energy is already a significant cost for many
businesses in its own right, so taking action
to improve energy efficiency is often easy to
justify in simple cost/benefit terms, regardless
of any environmental factors. In many cases,
there may be little or no cost involved in
making improvements. Even where there
are costs, these are often easily justified
by the benefits they create. The relative
attractiveness of making improvements
is enhanced even further by a number of
Government policies that aim to encourage
businesses to be more energy efficient.
Structured management of environmental
aspects and impacts is part of good
general management. As with any business
expenditure, costs will tend to drift upwards
if they are not reviewed periodically.
Inefficiencies and wasteful practices tend to
creep into any system that is not monitored
and controlled. Therefore, taking a systematic
look at environmental costs for the first
time is bound to identify opportunities for
improvements and cost savings.
5.2 Legislation, regulation and public policy
This section outlines six laws and Government
policies that are designed to address climate
change and which could be relevant for
accountants. These include those that are
existing policies and those that are being
5.2.1 Climate Change (Scotland) Act 2009
The Climate Change (Scotland) Act sets
an ambitious and challenging statutory
framework to reduce greenhouse gas
emissions in Scotland. It sets an interim
42% reduction target for 2020 and an
80% reduction target for 2050, based on
1990 levels. Further details of the Climate
Change Act are available on the Scottish
Government website (
5.2.2 Climate Change Levy
The Climate Change Levy (CCL) was
introduced in 2001 as a tax on energy that is
generated from fossil fuels. It is levied at the
rates shown in Table 1.
Energy that is generated from renewable
sources (‘green’ electricity) is exempt, to offset
any extra costs of generating electricity in this
way. Also exempt are approved combined heat
and power (CHP) systems and companies in
sectors that are covered by climate change
5 Energy
Remember: If you don’t measure it, you can’t manage it.
Businesses operating in sectors that are deemed to be energy intensive such as aluminium, chemicals and food, may
get an 80% reduction if they join an agreement negotiated between their trade body and the Government.
NB: these rates will change each year in line with inflation – the rates shown above were effective as from
April 2011. Updated rates can be found on the Business Gateway website (
Fuel Rate
Electricity 0.485 pence per kWh
Gas 0.169 pence per kWh
Petroleum gas or other gaseous hydrocarbon supplied in a
liquid state
1.083 pence per kilogram
Any other taxable commodity (e.g. coal) 1.321 pence per kilogram
Table 1 Climate Change Levy rates
16 17
The CCL was originally intended to be
revenue-neutral. A portion of the revenue that
it raises (about £1 billion) is, therefore, applied
to reduce businesses’ costs in other ways to
compensate, and to set up funds to support
environmentally positive actions that would
otherwise have to be funded from general
taxation. These uses include:
reducing employers’ National Insurance •
contributions by 0.3%;
£50 million/year on providing free advice •
and guidance to businesses on energy
; and
£100 million/year on Enhanced Capital •
Allowances (ECAs).
5.2.3 Enhanced Capital Allowances
The ECA scheme allows companies that
invest in certain specified capital equipment
to claim a 100% capital allowance against
their taxable profits in the year of purchase,
with a consequent boost to cash flow and
reduction in the net cost of the asset. These
are specified products of either energy saving
plant and machinery or water conservation
plant and equipment. Some examples are:

motors and drives;•


refrigeration equipment;•


solar thermal systems;•

meters and monitoring equipment; and•

cars with low CO•
A comprehensive list of the specific items that
are approved can be seen at the ECA website
( This also describes the
criteria and procedures for manufacturers
to get their products approved to make them
more attractive to potential customers.
5.2.4 Cap-and-trade schemes, the Emissions
Trading Scheme and the CRC Energy
Efficiency Scheme
Trading systems based on a ‘cap-and-
trade’ principle are an alternative way for
governments to implement environmental
policy by using an economic rather than a
regulatory tool.
With a trading system, the Government sets
a limit on the total quantity of a specified
pollutant that can be emitted and then issues
allowances to businesses that wish to emit
those pollutants. These initial allowances
may be sold off by the Government, usually
by auction, or simply allocated to current
participants on the basis of their past and
present levels of emissions (known as
In either case, the key principle is that the
allowances can subsequently be traded
between participants. Therefore, a business
that finds it does not need all the allowances
it owns can sell them to another. A business
that emits more than the allowance (via the
permits it holds) will incur a fine. Emissions
monitoring is checked using a third-party
There are two main carbon-trading schemes
relevant to Scottish businesses – the
European Union Emissions Trading Scheme
(EU ETS) and the CRC Energy Efficiency
Scheme (CRC). The EU ETS began in 2005
and Phase II commenced in January 2008. It
runs until December 2012. It is mandatory
on heavy industrial energy users (e.g. power
generators and manufacturers of steel and
cement), but does not cover aviation, transport
and the public sector. The CRC is a domestic,
UK-wide emissions trading scheme that
will reduce carbon emissions from large
commercial and public sector organisations

(e.g. as supermarkets, hotel chains,
banks, Government departments and local
authorities) that are not necessarily intensive
users of energy.
See section 9 for references to further sources of advice and information for business.

The term ‘organisation’ is used deliberately here rather than ‘business’. The CRC applies to organisations as a whole, rather
than the separate companies within; it also extends to non-corporate entities such as Government departments.
There are two main
schemes relevant to
Scottish businesses
– the European
Union Emissions
Trading Scheme (EU
ETS) and the CRC
Energy Efficiency
Scheme (CRC)
5.2.5 Energy Performance of Buildings
(Scotland) Regulations
The Energy Performance of Buildings
(Scotland) Regulations 2008 are a direct
result of the European Energy Performance
of Buildings Directive. The Regulations came
into effect in January 2009 and are governed
by the Scottish Building Standards Agency.
The key aspects of these Regulations have
been the introduction of Energy Performance
Certificates (EPC), inspections of air-
conditioning systems and issue of advice on
An EPC is required for all buildings when they
are built, rented or sold. In addition, large
public buildings are required to obtain and
display an EPC in a prominent place. The
certificate is based on the energy efficiency of
a building with CO
ratings presented in bands
from A–G–A being the most efficient. It also
includes a report providing recommendations
for cost-effective improvements, the
associated payback period and carbon impact.
contents/made for more information about
the Regulations.
5.3 Accounting responses
This section looks at ways in which
conventional accounting systems and
procedures might be adapted to support
energy cost management in the short-term
and long-term.
5.3.1 Short-term cost management
Energy consumption is a significant cost
for most businesses. Accountants can help
companies adopt a two-step approach to
maximise energy savings and their cost-
This approach consists of:
implementing a systematic approach •
to monitoring and controlling energy
consumption; and
targeted investment in energy efficient •
Further guidance can be obtained from the
Carbon Trust (
and the Energy Saving Trust
5.3.2 Long-term decisions and strategy
Modern accounting recognises that many of
the costs that a product will incur over the
whole of its life are largely determined during
its design stage, even before production has
started. Life-cycle costing aims to measure
the whole-life costs and help to avoid making
decisions that might save costs initially, but
then incur higher costs later. For more details
on life-cycle costing, see section 7.
Like costs, many environmental impacts are
largely determined for several years into the
future once initial decisions are taken on
matters such as investments in new capital
equipment or taking on long-term projects.
For example, constructing a building with
inadequate insulation or without provision for
natural cooling to avoid the use of energy-
fuelled air conditioning, could prove to be
an expensive short-term expedient since
subsequent retrofitting is invariably much
more expensive and less satisfactory than
‘getting it right first time’.
Therefore, it is crucial that decisions like
these are taken in full awareness of all
the facts, including the likely costs and
environmental impacts over the full life of
the project. Since the costs of energy and
other environment-related assets are likely
to increase disproportionately over time
compared with general inflation, this cannot
be done simply by basing decisions on the
costs that are currently being incurred.
The accountant’s first responsibility here is to
ensure that decision makers and planners are
provided with adequate information and the
analytical tools to use this.
Energy consumption
is a significant cost
for most businesses.
Accountants can help
companies adopt a
two-step approach
to maximise energy
savings and their
18 19
5.4 Footprinting, offsetting and adaptation
As well as the conventional accounting
responses described above, there are a
further three aspects that have recently
become topical – carbon footprinting, carbon
offsetting and adaptation.
5.4.1 Carbon footprinting
Increased concern over climate change
has led many businesses to calculate, and
sometimes also disclose externally, their
total CO
emissions or ‘carbon footprint’. This
is sometimes linked to a declared strategy
of becoming ‘carbon-neutral’ and often
also involves ‘carbon offsetting’ (see below).
Carbon footprinting can be done at several
different levels: for a business as a whole, for
different types of unit such as for a product or
an event, or for an individual person
Helping businesses to measure their carbon
footprints is something that accountants are
well positioned to contribute to and guidance
can be obtained from the Carbon Trust
website (
5.4.2 Carbon offsetting
Carbon offsetting is a process by which a
business that emits CO
, can simultaneously
take some action to compensate for this by
reducing CO
emissions elsewhere so that the
net effect is zero.
In principle, this action could be undertaken
directly or indirectly, for example:
to plant trees that will absorb CO•
from the
atmosphere (direct); and
making a payment into a fund that will then •
be used to support actions to reduce or
avoid emissions elsewhere (indirect).
Carbon offsetting is well established – it is
a central feature of the Kyoto Protocol
, for
example, and is used by the UK Government
to offset the CO
emitted as a result of its own
All businesses that claim to be carbon-neutral
depend on indirect offsetting to achieve this
to at least some extent, since it is impossible
to operate commercially without at least
some activities that will involve emissions
of greenhouse gases. Visit
co2_offsetting/co2_offsetting.aspx for more
5.4.3 Adaptation
The UK Climate Impacts Programme (UK-
CIP) has been set up by Government to
support adaptation with research and public
information, and as part of this has developed
the Business Areas Climate Impacts
Assessment Tool (BACLIAT). BACLIAT aims to
provide a process that businesses can follow
to review their current and planned activities,
and assess their vulnerability to the potential
effects of climate change, and then plan
how best to respond. This can include taking
advantage of potential opportunities offered by
climate change as well as defending against
risks and threats.
BACLIAT looks at seven business areas
including finance. Issues for each business to
consider in the finance area, assessed against
the full range of its present activities and
those planned for the future, include:
implications for insurance – potentially •
increased and less predictable premiums,
and some risks becoming uninsurable;
the need to ‘future-proof’ investments, •
especially those with long asset lives; and
the risk that new liabilities could arise even •
in existing developments and the increased
cost-effectiveness of higher specifications in
future developments.
Visit the UK CIP website (
for more information on BACLIAT.
The Carbon Trust provides some initial guidance on carbon footprinting at
for more information on the Kyoto Protocol.
See for
examples of the types of project (usually in developing countries) to which the Government contributes for its own offsetting.
Logistics, finance, markets, process, people, premises and management implications.
6.1 Business activities and environmental
Transport has several environmental impacts,
the most significant arising from the use
of fossil fuels as the main source of energy
during the ‘use’ phase of a vehicle’s life.
The main environmental impacts of transport
other pollutants to air – emissions from •
exhausts of nitrogen oxide, carbon monoxide
and particulate matter (PM
noise; and•

land use.•
6.2 Legislation, regulation and public policy
The main direct effect on business of
environmental legislation on transport
is to increase the cost of road transport
through a variety of taxes and, therefore, to
provide incentives to business to improve
fuel efficiency. The following sections give
examples of these.
6.2.1 Using more efficient vehicles with
smaller engine size
Reduced annual vehicle excise duty (VED) •
for cars registered since 2001. This is based
directly on the standard CO
emissions per
kilometre for that model
Reduced total fuel costs. In March 2011, •
around 60% of the cost of an average litre
of unleaded petrol was represented by fuel
duty and VAT.
Reduced tax on the initial purchase cost of •
the car.
6.2.2 Travel on public transport

Increased productivity of staff. Using rail •
rather than road transport means that staff
can work while travelling and will usually
arrive at their destination less fatigued.
Zero congestion charge costs.•
6.3 Accounting responses
As with energy used in buildings, there are
ways in which the usual accounting systems
and procedures can be adapted to support
cost management in the short term and the
long term. Both of these are best supported
by appropriately designed accounting systems
and codes.
Much of this will already be standard good
practice for those businesses where transport
costs are a significant business cost, such
as road hauliers. Therefore, the following is
mainly aimed at the majority of businesses
where the transport of people and goods is
only ancillary to their main business, but
collectively represent the main impact.
The manner in which each business provides
employees with remuneration policies on
transport options may have a significant
bearing on the environmental impact and
cost to the business. For example, paying an
employee a fuel allowance for using a car
which is not payable if public transport is used
will incentivise him/her to drive. Designing
transport allowances more flexibly could
mean cost savings for the business, a reduced
carbon footprint and more freedom of choice
for employees.
6.3.1 Short-term cost management
There are several simple actions that
businesses can take to improve their transport
fuel efficiency and reduce their impact on
the environment. Efficient driving techniques
alone are estimated to save drivers in excess
of £200 per year.
It can be helpful if someone in a business
keeps a central database of different options
for travel frequently done by staff, with
relevant up-to-date information on costs. This
can then be used as the basis for occasional
analysis of the full costs of business travel by
staff, including:
6 Transport
The current VED rates for different classes of vehicle can be found at
20 21

the marginal costs per mile of travel – for •
cars this is not only the fuel costs, but other
variable costs too, which can sometimes
also include depreciation – see the box
below on the AA’s analysis of motoring costs;
the cost of staff time spent in travel; and•
emissions (and other significant
environmental impacts too if feasible).
Motoring costs - fixed or variable?
The easy assumption unquestioningly made
by many people is that the marginal costs of
running a car are limited to the fuel costs,
and that this is a sufficient basis for dividing
the costs between occupants in car-sharing
schemes, for example.
The AA regularly updates its published
calculations of motoring costs and makes
these freely available. Its 2010 guide
shows that the costs of owning and using a
typical 4-year old petrol-engine car, which
originally cost £18,000 and covers a distance
of 10,000 miles/year, are:
£3,907/year standing charges (i.e. fixed •
costs); and
24 pence/mile running costs (i.e. variable •
costs (this is based on fuel costs at 133
pence per litre)).
This gives a total average cost of 63 pence/
Fuel at 16 pence/mile represents two-
thirds of the running costs, but other
variable items such as tyres, service labour,
replacement parts and parking account for
the remaining 8 pence.
In addition, depreciation of £2,510 is included
in the annual standing charges and is,
therefore, effectively treated as a fixed cost.
This is of course consistent with the basis
for calculating depreciation for financial
reporting, which most businesses follow.
However, most motorists replace their cars
after a certain total mileage is reached,
or for mileage-related reasons, such as
increasing maintenance costs or worries
over reliability. Even for those owners who
will change their vehicles after a certain
period of time in any case, an increased
mileage will mean a significantly lower
resale or trade-in value at the end of the
car’s life.
If the timing of the end of a vehicle’s life,
and its disposal value at that time, are
mainly determined by usage rather than
by time, then depreciation is logically
a variable rather than a fixed cost. The
total marginal cost per mile is then more
realistically calculated as 49 pence/mile (24
pence for fuel, tyres, etc, plus 25 pence for
If decisions on using private car transport
were based on a perception that the
real marginal cost is around 49 pence/
mile rather than only the fuel cost, then
current levels of private car use might
be significantly reduced even without any
further increase through road pricing.
However, there is still a widespread
misperception that fuel is not only the major
cost of motoring, but also the only marginal
cost. This is due in part to a readiness to
accept established wisdom and published
quantities without query, and also a popular
misunderstanding of what accounting
concepts such as depreciation really mean.
NB: the AA’s calculations of motoring costs
are available at
advice_rcosts_petrol_table.jsp (petrol) and
advice_rcosts_diesel_table.jsp (diesel).
Benchmarking travel performance in the
university sector
6.3.2 Accounting systems
As with other areas, good accounting starts
with capturing data in sufficient detail, and
designing systems to record and process
these data so that the results can be used to
provide helpful information to management.
As a minimum, separate codes should be set
up for each of the main alternative modes of
travel – car, rail, air, etc. This will also help the
business to calculate a carbon footprint, since
the costs charged to each code will then be a
close proxy for CO
Following requests from their customers,
several travel agents have now started to
record in more detail the travel that they book
for their customers. This enables them to
keep a record of distance, frequency, whether
journeys are long-haul or short-haul, etc, to
make subsequent conversions to CO
The box below on the ‘HEEPI’ study describes
a situation where poor design of accounting
codes not only made it impossible to carry
out the benchmarking comparisons that had
been intended between different universities,
but would even have hindered any attempt by
an individual university to use the information
available from its accounting systems to
support its own environmental management.
A group of UK universities collaborated
in a project to benchmark data on their
respective environmental performances
in the HEEPI project
. The main impact
areas for universities arise from estates
management of campuses and buildings,
and travel by staff and others on university
Some comparative data on estates
management were already being regularly
generated since this was required by
the sector’s funding council. There was
nothing comparable in existence for travel,
but it was planned to start from the costs
recorded in each university’s usual financial
records and see how far this was sufficient
or needed to be supplemented with further
However, it was quickly found that although
the costs recorded by each university
might be adequate for its own purposes
as a record of its spending, they were
of little value for benchmarking against
different institutions. This was due to
fundamental differences in the designs of
each university’s accounting systems and,
in particular, the definitions used for their
accounting codes.
In principle, it could have been possible to
work back from the amounts posted to each
university’s financial records to the original
invoices and expense claims to reconstruct
the data in a sufficiently detailed and
consistent way to enable valid comparison
but, in practice, this would have been so
time consuming as to be infeasible.
Although it had been hoped that the
financial records would provide a good basis
for benchmarking, the study found that
without consistency in record-keeping from
original data capture onwards, this could not
be realised in practice.
Higher Education Environmental Performance Indicators.
22 23
If practicable, breaking down costs into
separate records for each car and/or driver
will help to support management control
since each car/driver can then be treated
as a separate cost centre. This can be used
to assess different drivers’ relative skills in
driving efficiently and responsibly, and this
can then also be encouraged with incentives
– financial or otherwise.
6.3.3 Long-term decisions and strategy
As with energy in buildings, some long-term
plans and strategic decisions can ‘lock-in’
environmental impacts for several years
into the future. There are two different ways
of approaching this. Firstly, acquire assets
that meet the business need with less
environmental impact (e.g. cars with lower
emissions per mile or energy-efficient
buildings that are designed to require less
heating in winter and less air-conditioning in
summer). Secondly, and more radically, so
far as possible, reduce the need for personal
mobility in the first place. In both cases, the
accountant’s responsibility is to ensure that
decision makers and planners have adequate
information and analytical tools to choose
between the alternative options.
Acquire assets that meet the business need,
but with less environmental impact, for
cars with lower CO•
emissions per mile;

cars powered by more environment-friendly •
fuels; and
buildings that are serviced by public •
transport and sustainable travel networks.
Elimination and reduction
Eliminate and reduce the reasons for the need
of transport and personal travel itself, for
using telephone and video-conference •
calling rather than face-to-face meetings;
online discussions;•

encourage car-sharing;•

promote sustainable travel, such as cycling •
and walking;
work-from-home initiatives and distance •
learning schemes; and
locate new premises to be easily accessible •
by public transport.
Training and support

The Energy Savings Trust has a transport •
advice programme available to businesses
in Scotland, and offers practical solutions
to help reduce costs and improve the
environmental performance of car and van
fleets. Visit
scotland/Transport/Business for more
The UK Road Safety website •
( provides details
on various courses available to businesses
in the Fleet/Corporate section.
Some long-term decisions can have a
continuing long-term effect on the need for
personal mobility that may not always be
immediately obvious, such as the location of
business premises and the structure of the
organisation design. A design which physically
separates people who need to speak with
each other regularly will increase the need for
travel, but relatively minor re-organisations
can sometimes reduce it.
7.1 Introduction
Supply chain management (SCM) is the
process of managing products and services
not only in a business’s own boundaries, but
also upstream and downstream along the
whole of its supply chain.
SCM is broader than a traditional purchasing
function, and includes all activities involved in
sourcing, procurement and logistics. Effective
SCM invariably requires co-ordination and
collaboration with suppliers, intermediaries,
third-party service providers and customers.
SCM is a business function in its own right
and is not usually the direct responsibility
of accountants. However, an awareness of
SCM and what it can mean for a business’s
environmental performance and reputation
are important since:
some stakeholders, including pressure •
groups and the media, are increasingly
treating businesses as being effectively
accountable for the consequences of their
actions, not only in their own boundaries,
but along their supply chains too;
conventional accounting practices can •
sometimes have a negative effect unless
applied sensitively; and
more positively, accountants can provide •
support with help with data collection,
measurement and analyses.
7.2 Supply chain management, the
environment and accountants
7.2.1 Information requirements
Accountants appreciate how difficult it can
be to ensure that data definitions, and the
information that is generated from them,
are always consistent even in a single
organisation. This challenge is multiplied
when these data are sought from a large
number of suppliers worldwide that may have
different data definitions or not be collecting
the necessary data in the first place.
The case study of the Carbon Disclosure
Project describes one initiative to attempt to
simplify this challenge by setting a standard
method of gathering carbon footprint
information from suppliers.
7 Supply chain management
Carbon Disclosure Project
The Carbon Disclosure Project (CDP) is an
independent, not-for-profit organisation. It
represents major institutional investors and,
on their behalf, seeks information on the
business risks and opportunities presented
by climate change and greenhouse gas
emissions data from the world’s largest
companies. The CDP website is the largest
repository of corporate greenhouse gas
emissions data in the world.
Since sending out its first request for
climate change information in 2003, the
number of disclosing companies has
grown tenfold. Over 3,000 organisations in
some 60 countries around the world now
measure and disclose their greenhouse
gas emissions, water management and
climate change strategies through CDP
so that they can set reduction targets and
make performance improvements. These
data are made available for use by a wide
audience including institutional investors,
corporations, policy makers and their
advisors, public sector organisations,
government bodies, academics and the
The CDP operates in most major economies
worldwide and channels information and
progress through five separate programmes
– Investor CDP, CDP Public Procurement,
CDP Water Disclosure, CDP Supply Chain
and CDP Cities. All allow access to, and
demonstrate theories of, environmental
Visit for more information.
SCM is broader
than a traditional
purchasing function,
and includes all
activities involved
in sourcing,
procurement and
24 25
7.2.2 Product design and the environment
SCM starts with the design of the product.
Like costs, many environmental impacts are
effectively decided for the whole life of the
product long before the first unit is produced
and cannot easily be changed afterwards.
Therefore, product designers are crucial.
They need relevant and reliable information
immediately to hand in an understandable
format to build the product’s future
environmental performance into its design,
along with other objectives such as its
performance in use, product quality and cost.
They often have to work under severe time
pressures to get a product designed quickly
so the business can get it to market before
competitors do, so this information needs to
be immediately to hand when needed in an
accessible and reliable form. The box below
reports one study at a major electronics
business into different ways of achieving this.
Visit for
further information on eco-design.
Product design for environmental performance at an
electronics business
A company manufacturing electronics
products for use in telecommunications
recognised that in its sector, where
technology rapidly develops, innovative
design and time-to-market are crucial.
At the same time, the products may have
a physical life of several years or even
decades, so until they become technically
obsolete, their environmental impacts may
be long-lasting.
The problem that the company identified in
its design process was that its designers
were not always clear on the environmental
objectives to aim for in products, what
information might be relevant to assessing
this and how to make sense of what seemed
to be a mass of unfamiliar data. Therefore,
the company commissioned a study to
develop a tool for designers to help them
to clarify and condense the data and make
them usable at short notice.
Three methods were investigated:
a visual ‘compass’ that showed the •
product’s profile compared with
alternatives for each of six different
environmental attributes (e.g. energy
demands over its life, the use of
hazardous materials, ease of recycling (or
similar) at the end of its life;
a ‘scoring’ approach that assigned points •
to these attributes and aggregated them
into an overall score; and
a costing approach that aimed to identify •
the external costs of the product.
The study found that all three methods were
potentially useful in different ways in helping
designers to understand environmental
considerations and take them into account.
However, what was even more critical was to
have an adequate database of the necessary
information to hand immediately as and
when needed, since the time pressures
of product design did not allow space for
extensive data-gathering exercises.
7.2.3 Shared savings (‘servicising’)
When a business buys an asset, it is not the
asset as such that it requires so much as the
services which that asset can then provide
for the business. A familiar example of this
principle is when a start-up business may
prefer to rent premises and equipment rather
than to purchase them outright. Although this
may be more expensive in the long-run, it is
worthwhile if it helps to conserve a scarce
resource (such as cash) at a particularly
critical time.
The same thinking can be applied to
purchases of raw materials and consumables
to realise environmental benefits and cost
savings. Traditionally, a purchaser would
identify his/her needs for raw materials
and consumables, and then contract with
a supplier to provide these at the lowest
possible price. The problem with this
approach is that it gives the supplier an
obvious incentive to increase its sales volume,
and no incentive to help its customer to
minimise the quantity it uses.
In a ‘servicised’ contract, the supplier is paid
not for the volume of what is supplied, but for
its service performance. This responsibility
for managing what was supplied is thus
being outsourced by the customer, which
provides the supplier with an incentive to look
for ways to minimise rather than maximise
the quantities consumed. This conserves
resources and, with materials such as
hazardous chemicals, can reduce risks and
environmental impacts. In the long-run, the
supplier also has an incentive to look for
ways to redevelop or reformulate what it is
supplying, possibly even to substitute it with a
different technology.
Of course, there are downsides to this
arrangement because the customer is
effectively reducing its own direct control
over part of its production process, and its
own incentive to minimise quantities used
is correspondingly reduced as the supplier’s
is increased. Whether this is worthwhile in
any case depends on the relative balance of
knowledge between supplier and customer. In
sectors such as chemicals, where servicising
has become well established, the complexity
of the materials means that the balance of
expertise is more likely to be with the supplier
than with the customer, since the costs of
purchasing the chemicals may be much less
than the costs of then storing and managing
7.2.4 Life-cycle assessment and life-cycle
Life-cycle assessment (LCA) is a well-
established environmental management
technique to assess the total environmental
assessment is a
technique to
assess the total
impacts of a product
or service from
‘cradle to grave’.
26 27
impacts of a product or service from ‘cradle
to grave’ in the various different stages of the
product’s life
Life-cycle costing (LCC), also known as
whole-life costing, measures the total
cost of ownership of an asset or project
over the whole of its life including capital
costs, installation costs, operating costs,
maintenance costs and disposal costs. An
example of LCC in practice is shown in the
case study below.
Life-cycle costing of batteries at the University of
The University of Cambridge has a policy of
basing procurement decisions on whole-
life costs, arguing ‘traditionally, purchasing
considerations went no further than the
initial purchase price [but] this initial outlay
may not be the largest expense … whole-
life costs include this initial outlay, but also
consider the operational and disposal costs
of the product’.
A comparative analysis that it carried out on
alternative types of battery shows how LCC
can reveal a dramatically different result
than would be obtained from a traditional
purchasing decision made on the basis of
minimising just the initial purchase cost.
Whole-life costing comparison of batteries
Alkaline Zinc
Cost of a pack of four batteries (£) 2.50 1.50 6.50
Battery life (hours) 15 6 7
Number of packs needed for 1,000 hours of power 67 167 1
Purchase cost (£) 167.50 250.50 6.50
Recharging unit (£) 0 0 10.00
Energy to recharge (£) 0 0 1.43
Disposal cost (£) 5.70 14.20 0.04
Total cost (£) 173.20 264.20 17.97
The University suggests that it is worthwhile to do this sort of analysis for high-value
products and for low-value products that are purchased in high volumes. Similar results
can be obtained for other familiar and mundane products such as light bulbs.
Note that the terms ‘life-cycle assessment’ and ‘life-cycle costing’ when used in the context of environmental management
refer to the life cycle of an individual product, rather than of a product-line which is how the term is usually used in
conventional management accounting.
8.1 Environmental management systems
8.1.1 Understanding the basics of an
environmental management system
Management systems help companies to take
a systematic approach to managing business
issues. Best practice management systems
are based on a four-stage cycle (see Fig 4).
The Plan-Do-Check-Act (PDCA) cycle is
the operating principle of environmental
management system (EMS) standards.
Plan Establish objectives and make plans (analyse your business’s situation,
establish your overall objectives, set your interim targets and develop plans to
achieve them).
Do Implement your plans (do what you planned to do).
Check Measure your results (measure/monitor how far your actual achievements
meet your planned objectives).
Act Correct and improve your plans and how you put them into practice (correct
and learn from your mistakes to improve your plans to achieve better results
next time).
Fig 4 Plan-Do-Check-Act cycle of an EMS
8 Other environmental management
28 29
An EMS can be thought of as a
communications framework of procedures
and management programmes that
co-ordinate effective management of
environmental issues for a business. EMS
standards such as ISO 14001 and the EC’s
Eco-Management and Audit Scheme (EMAS)
(see section 8.1.3) require a business to
compliance with relevant environmental •
legislation and other requirements to which
the business subscribes;
prevention of pollution; and•

continual improvement in its environmental •
This involves:

identifying relevant legal environmental •
requirements and the environmental
impacts of the business’s activities;
writing an environmental policy;•

setting targets to reduce significant •
environmental impacts;
developing management programmes to •
allocate responsibilities, resources and
timescales to achieve the targets;
audits to check progress against targets; •
management reviews to evaluate the overall •
effectiveness of the EMS.
8.1.2 EMS drivers

Manage a business’s impacts on the •
Improve resource and energy efficiency, and •
associated reduction in waste volumes and
Manage risks, liabilities and legal •
Evaluate and improve a business’s •
environmental performance in a verifiable
Improve communication and corporate •
image with employees, shareholders and
other stakeholders.
Conformity with customer requirements.•

Promote sustainable procurement in a •
A framework for continual improvement of a •
business’s environmental performance.
8.1.3 EMS options
It is recommended that organisations use a
national or international standard. There are
three recognised standards or schemes:
ISO 14001 is the international standard
for EMSs. It specifies the features and
requirements necessary to help organisations
systematically identify, evaluate, manage and
improve the environmental impacts of their
activities, products and services.
Visit the ISO website (
htm) for more information.
Eco Management and Audit Scheme (EMAS)
is a voluntary EU-wide scheme. It requires
firms to produce a public statement about
their performance, focuses on legislative
compliance and includes ISO 14001 as the
requirement for the EMS component.
EMAS is administered in the UK by the
Institute of Environmental Management and
Assessment (IEMA) (
BS8555 is an addition to the EMS family. It
breaks down the implementation process
for ISO 14001 or EMAS into six stages.
BS8555 encompasses criteria used in the
Acorn Inspection Scheme developed by
IEMA, which enables companies to gain
accredited inspection and recognition for
their achievements at each step as they work
towards ISO 14001 or EMAS.
The environmental performance focus of
BS8555 is valuable in the supply chain and
concentrates on:
delivery of measurable benefits for •

delivery of performance data for internal/•
external reporting; and
maximum credibility and competitive •
Visit for more
A recognised standard provides a sound basis
for high-quality environmental reporting.
8.2 Environmental reporting
Environmental management accounting
techniques can also help a business to
report publicly on its environmental policy
and performance by providing trend data
on physical quantities and costs. This
can protect or improve its reputation and
aid communication with a wide variety of
stakeholders. Demonstrating concern about
environmental issues can differentiate the
business from the competition and attract
customers and investors, and reporting can
also enhance its reputation as a responsible
employer, thus improving staff recruitment
and retention.
A business’s environmental performance can
be reported by including an environmental
section in the annual report and accounts or
by producing a stand-alone report covering
environmental performance (and most likely
wider sustainability or corporate responsibility
issues). Reporting is increasingly done
over the Internet, usually as a supplement
to conventional hard-copy reporting, but
sometimes instead.
Where possible, businesses should include
trend data in these reports to show how their
performance has changed over time.
The Global Reporting Initiative (GRI) acts as
a voluntary standard-setter in sustainability
reporting to try to harmonise practice across
different businesses. Its Sustainability
Reporting Guidelines recommend the process
that a business should follow in reporting,
and suggest different performance indicators
of different aspects of sustainability that
a business can consider reporting. These
guidelines are available on the GRI’s website
The Accounting for Sustainability project
set up by HRH the Prince of Wales has also
produced its own recommendations on
‘Connected Reporting’
8.2.1 Why report on environmental
Interest from stakeholders in the
environmental performance of business
is at an all-time high. The EU Accounts
Modernisation Directive (AMD)
means that
whether your business is a plc or a large
private company, you will need to report
to investors on how environmental issues
will affect your profitability. The Directive
also requires companies to include, where
appropriate, non-financial key performance
indicators (KPIs) relating to environmental
matters. Although the Directive applies only
to large companies, medium-sized companies
are encouraged to report on these issues
voluntarily in recognition of the benefits that
such disclosure brings to the operation of the
The Companies Act 2006 expands on the
requirements of the AMD. The requirements
of the Act came into force in 2007 and 2008
and change the way in which companies
report on environmental matters. The Act
introduced new reporting requirements for
quoted companies from October 2007 ‘to the
extent necessary for an understanding of the
development, performance and or position
of the company’s business’. Companies need
to ensure their business review includes
information about:
environmental matters (including the •
impact of the company’s business on the
the company’s employees; and•

social and community issue.•
Visit for more
See for more information.
The Global Reporting
Initiative (GRI)
acts as a voluntary
in sustainability
reporting to try to
harmonise practice
across different
30 31
8.3 Key environmental performance
Key environmental performance indicators
(KEPIs) are tools that provide a quantifiable
metric for measuring and monitoring the
environmental performance of a business.
As discussed earlier, there is an increasing
acknowledgment that good environmental
performance makes good business sense.
Therefore, the use of KEPIs will help
businesses to manage and communicate
the links between the environmental and
the financial performance aspects of their
For instance, poor management of energy,
natural resources or waste can affect
productivity rates. Failure to consider rising
costs and risks of environmental pollution
for a future in which environmental image
and marketing of a business are likely to be
significant, may risk the business’s long-term
survival. Therefore, the Government expects
that businesses will need to use KEPIs to
capture the link between environmental and
financial performance adequately.
Table 2 highlights commonly used KEPIs
under each of the four sections (waste, water,
energy and transport) that should provide a
starting point for a business’s measurement
of its environmental performance. Each
business may have different appropriate
KEPIs, but the important issue is to have
visibility at the bottom line of the real costs
(and environmental impacts) to the business.
Businesses should seek to identify their
most important environmental matters and
utilise the benefits that KEPIs will bring.
Accountants have a critical role in informing
top management on business efficiency.
In January 2006, Defra produced a set of
environmental reporting guidelines to help
companies to identify and address their most
significant environmental impacts.
These guidelines outline how businesses
might begin to set targets/KEPIs against
which to measure environmental
performance. Businesses can make use
of standard data that are already collected
(e.g. from EMSs and utility bills). The
environmental guidelines also provide
guidance on how data could be reported.
Further information on KEPIs can be seen
on the Defra website (
guidelines-pb11321/) and on the GRI website
mentioned above.
Aspect Unit KPI

Electricity (from fossil fuel)•

Electricity (from ‘green’ •
Fuel oil•


Other (woodchip/biomass •
boiler fuel)
Climate Change Levy (CCL) •

kWh energy •
floor area

Units of production •

Number of employees•

Cost (£)•

Total fuel usage•

kWh energy/m•
floor area

kWh energy/unit of •
Energy cost/unit of •
For total usage: % of •
‘green’ fuel vs fossil fuel
CCL cost/unit of production•

CCL cost/person•
Table 2 Commonly used environmental management accounting key performance indicators (KPIs)
In January 2006,
Defra produced a
set of environmental
reporting guidelines
to help companies to
identify and address
their most significant
Aspect Unit KPI



Hybrid engine fuel usage•

Transport mode •
(private car, fleet car, truck,
public transport)
Bicycle use•

Walking to work•

Teleconferencing and •

Distance travelled•

Litres of fuel used•

Tonnes of product shipped•

Unit of production•

Number of employees•

Number of deliveries•

Number of staff journeys•

Cost (£)•

Miles and time of staff •
journeys avoided (e.g.
by using IT-based
Litres of fuel type used per •
shipment per person
Efficiency: fuel usage per •
unit of distance travelled
(e.g. litres/km)
Litres of fuel (and cost) •
saved – by avoiding
journeys through the use
of remote communication
For total usage: % of total •
transport fuel from fossil
fuel (vs ‘greener’ fuels)
% of employees walking/•
cycling to work (vs private
car use)
Aspect Unit KPI
Water •

Effluent (wastewater)•

Effluent quality •

Water pollution incidents•

Quantity of water •

Quantity of effluent •

Quality which meets •
effluent consent/permit
Number of exceedances •
beyond effluent consent/
permit levels
Number of employees•

Units of product processed •
(number/tonnes, etc)
Number of water pollution •
water/unit of production

Number of water pollution •
incidents per year
Number of wastewater •
permit exceedances per
Aspect Unit KPI

Electricity (from fossil fuel)•

Electricity (from ‘green’ •
Fuel oil•


Other (woodchip/biomass •
boiler fuel)
Climate Change Levy (CCL) •

kWh energy •
floor area

Units of production •

Number of employees•

Cost (£)•

Total fuel usage•

kWh energy/m•
floor area

kWh energy/unit of •
Energy cost/unit of •
For total usage: % of •
‘green’ fuel vs fossil fuel
CCL cost/unit of production•

CCL cost/person•
32 33
Raw materials and waste
Aspect Unit KPI





Packaging waste•

Packaging materials – •
Packaging materials – •
Waste to landfill (e.g. •
general waste)
Waste recycled (e.g. •
aluminium cans, paper)
Waste reused •

Waste sent for treatment •
as hazardous waste
Landfill Tax •

Quantities of raw material •
used (kg/tonnes/litres, etc)
Quantity of product •
manufactured (kg/tonnes,
litres, m
, etc)
Number of employees•

Cost (£)•

Time spent in manufacture•

Time and materials •

Tonnes of waste•

Tonnes of materials•

% of waste recycled•

% paper recycled vs paper •
Quantity of solid waste •
per unit production or per
Tonnes of waste generated •
per tonne of raw materials
Cost of waste per unit •
The environmental issue is fast-changing,
particularly in terms of legislation and
regulation. This Guide was written to offer an
accurate and balanced view of the situation
at the time of writing, but inevitably some
of its content will become outdated over
time. A regularly updated database of the
environmental legislation and regulation
that can affect businesses, plus guidance
for Scotland, can be found at the Business
Gateway website (
Association of Chartered Certified
Accountants (ACCA)
Going Concern?, ACCA’s social and
environmental policy document, with
recommendations to key stakeholders across
eight key areas.
ACCA research reports, including Banking
analysts’ perspectives on the materiality of
annual report voluntary disclosures and Social
and environmental reporting and the business
Report of the Judges, provides strengths of
ACCA award-winning reports and technical
recommendations for improving UK
sustainability reporting.
A collection of surveys on issue-specific
topics such as climate change, stakeholder
engagement and human capital management.
Accounting and Sustainability quarterly
e-newsletter, summarising global
sustainability developments, including
reporting, assurance, carbon accounting and
standards issues – subscribe for free online.
Chartered Institute of Management
Accountants (CIMA)
CIMA (2008), Climate Change Calls for Strategic
Change highlights why you should adapt your
strategy now, embedding climate change
issues into normal business life before it is too
costly or too late. CIMA proposes ten actions
that your organisation can put in place to help
you drive sustainable performance with regard
to climate change. Available from
CIMA (2008), Managing Responsible Business
report and survey. CIMA has teamed up with
the Institute of Business Ethics to produce
a new report that explores the debate on
corporate responsibility and business ethics.
The survey found the majority of respondents
agree that business has a moral obligation to
help address global issues such as climate
change and poverty. Many also believe
that environmental impact is of growing
importance and that it is an issue that
companies cannot afford to ignore. The report
can be downloaded from the CIMA website
CIMA Publishing (2007), Accounting for
Sustainable Development Performance
explores a variety of responses to the
sustainable development agenda, introduces
the sustainability assessment model (SAM)
and provides a case study of BP, that has
implemented SAM. The full report and
executive summary are available through the
CIMA website (
CIMA (2006), Accounting for ethical, social,
environmental and economic issues: towards
an integrated approach explores the extent to
which information published by companies
about their sustainability performance
discharges their duty of accountability to
external stakeholders on ethical, social and
environmental issues. Looks at whether
this information is integrated into strategic
decision-making. The executive summary is
available through the CIMA website (www.
CIMA (2006), Emissions trading and the
management accountant – lessons from the UK
emissions trading scheme explores the costs
and benefits of direct participation in the UK
Emissions Trading Scheme (UKETS). Outlines
the role of management accountants and their
systems in motivating reductions in emissions
that support the general initiatives to mitigate
the effects of climate change. The full
report and executive summary are available
through the CIMA website (www.cimaglobal.
Sustainability/ respectively).
9 Further reading
Environment Agency (EA)
Corporate environmental disclosures – EA’s
latest report looking at the environmental
disclosures of the 500+ companies in the FTSE
All-Share. Visit
for more information.
Corporate environmental governance –
research investigating the link between
the financial performance of a company
and how it manages its interactions with
the environment. Visit http://publications. for more
Environmental accounting case studies –
the EA produces annual reports using its
environmental accounting system
that examine its environmentally
significant expenditure, these can be
viewed and downloaded from its website
The Environmental Management Accounting
Network (EMAN)
Schaltegger S., Bennett M., Burritt R.
and Jasch C. (eds.) (2008), Environmental
Management Accounting for Cleaner Production.
Dordrecht, Netherlands: Springer Publishing.
Schaltegger S., Bennett M., and Burritt R.
(eds.) (2006), Sustainability Accounting and
Reporting. Dordrecht, Netherlands: Springer
Rikhardsson P., Bennett M., Bouma J.J. and
Schaltegger S. (eds.) (2005). Implementing
Environmental Management Accounting: Status
and Challenge. Dordrecht, Netherlands:
Springer Publishing.
Bennett M., Rikhardsson P. and Schaltegger
S. (eds.) (2003). Environmental Management
Accounting: Purpose and Progress. Dordrecht,
Netherlands: Kluwer Academic Publishers.
Bennett M., Bouma J.J. and Wolters T. (eds.)
(2002). Environmental Management Accounting:
Informational and Institutional Developments.
Dordrecht, Netherlands: Kluwer Academic
Bennett M. and James, P. (2001).
Eco-Management Accounting: Guidelines
for Accountants, Business Advisers and
Environmental Managers. London: British
Standards Institute and Hitchin, UK: JL
Publishing Ltd.
Bennett, M. and James, P. (eds.) (1998) The
Green Bottom Line: environmental accounting
for management – current practice and future
trends. Sheffield: Greenleaf Publishing.
The Institute of Chartered Accountants in
England and Wales (ICAEW)
ICAEW, Sustainable Business thought
leadership prospectus from ICAEW.
ICAEW, Sustainability: the role of accountants.
Bent, David, Forum for the Future (2008),
Competitiveness and Sustainability: Building the
Best Future for your Business, ICAEW.
Environment Agency and ICAEW (2009),
Reporting on Environmental Issues in Annual
Financial Statements: A practice guide to report
preparers, users and auditors.
The Business Sustainability Programme,
The Institute of Chartered Accountants of
Scotland (ICAS)
The Development of Corporate Websites
and Implications for Ethical, Social and
Environmental Reporting Through these Media.
Adams & Frost 2004 (ISBN 1-904574-06-8)
The Professional Accountancy Bodies and the
Provision of Education and Training in Relation to
Environmental Issues. Gray, Collison et al 2001
(ISBN: 1-871250-89-7)
The Valuation of Assets and Liabilities:
Environmental Law and the Impact of the
Environmental Agenda for Business. Gray,
Bebbington, Collison et al 1998 (ISBN:
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First published July 2011
Updated October 2011
All hyperlinks in this document were checked on 1 June 2011