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SESSION 4:
Accounting for Sustainability
By
Nuwan Gunarathne
Lecturer, Department of Accounting, University of Sri Jayewardenepura
SESSION 4:
Accounting for Sustainability
Environmental Management Accounting (EMA)
Represents a response of management accounting
Lacks a definite boundary or definition
Has emerged as an interface between management accounting and environmental management
SESSION 4:
Accounting for Sustainability
Environmental Management Accounting (EMA)
Identification, collection, analysis and use of
Physical information on energy, water and materials
(wastes)
Monetary information on environment-related costs,
earnings and savings
Users
SESSION 4:
Accounting for Sustainability
Types of EMA systems
Monetary EMA (MEMA)
expressed in monetary units
Physical EMA (PEMA)
expressed in physical units
SESSION 4:
Accounting for Sustainability
SESSION 4:
Accounting for Sustainability
Dimensions of EMA
Time frame (past, current or future)
Length of time frame (short term vs. long term)
Routineness (ad hoc vs. routine)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
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Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
EMA techniques
Accounting for energy Carbon accounting Accounting for water Waste accounting Material flow cost accounting Environmental capital budgeting Environmental activity based costing Life cycle analysis Sustainability balanced scorecard Environmental impact assessment
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
Comprehensive EMA Framework
EMAMonetary EMA Physical EMA
Short term focus Long term focus Short term focus Long term focus
Pas
t o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Futu
re o
rie
nte
d
Ro
uti
nel
y
gen
erat
ed
info
r
Ad
ho
c
info
r
Bu
rrittetal.
(2002)
SESSION 4:
Accounting for Sustainability
EMA in context
Not merely an environmental management tool among others
A broad set of accounting principles and approaches that provide information for the successful implementation of environmental strategies
Includes a wide array of accounting practices and acts as the common thread that supports environmental strategies
New practices are being introduced or existing practices adopted day-by-day
SESSION 4:
Accounting for Sustainability
EMA development stages
Stage 1 -Compliance
Stage 2 –Realization
Stage 3 -Environmental
Integration
Compliance Conservation Integration
Focus on main items Key stakeholder engagement Selected EMA practices
Vision
SESSION 4:
Accounting for Sustainability
Compliance Conservation Integration
Focus on main items Key stakeholder engagement Selected EMA practices
Vision
Comprehensive coverage All stakeholder engagement Inclusion in daily management (EKPIs)
SESSION 4:
Accounting for Sustainability
SESSION 4:
Accounting for Sustainability
EMA to Sustainability Management
Accounting (SMA)
When social dimensions are integrated into existing EMA systems there will be SMA
Social side of sustainability is the least developed
Accounting for the social dimension of sustainability is challenging- intangible- qualitative nature- lack of consensus on relevant criteria
SESSION 4:
Accounting for Sustainability
Pathways for professions
At present, the majority of sustainability accounting skills and knowledge comes from external training and in-house training
Universities & PAB should be proactive to cater to new demands of the work place
Incorporate accounting, engineering, architecture, physical sciences, etc
Trans-disciplinary approach for sustainability education(approaching a problem from a number of different perspectives beyond discipline boundaries)
Lighting candles….
At the Department of Accounting, USJ, we have introduced SMA and sustainability reporting
Objective is not to offer these subjects in few years time
Students work on different projects to understand the trans-disciplinary nature of sustainability
SESSION 4:
Accounting for Sustainability
Thank you
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