developments in environmental management accounting between 1996 and 2005 anna kumpulainen, dr....
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Developments in Environmental Management Accounting between 1996 and 2005
Anna Kumpulainen, Dr. Tuula Pohjola
Helsinki University of Technology / Lahti CentreDepartment of Industrial Engineering and Management
Environmental and Quality Management Unit
GIN, Cardiff 2.-5.7.2006
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Agenda
• Background
• Research questions
• Development of EMA requirements and guidelines (literature study)
• Introduction to case companies
• Development of EMA practices (case studies)
• Conclusions
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Background
• Environmental Management Accounting (EMA) = physical + financial environmental information for corporate internal decision-making
• Tuula Pohjola’s doctoral dissertation “Environmental Modelling System – A Framework for Cost-Effective Environmental Decision-Making Processes” (1999) – 3 EMA models: transport, energy and logistics– 10 case studies in 6 Finnish companies 1995-1996
• Follow-up study 2005– 4 companies– Data from interviews and corporate reports
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Research Questions
• How has EMA been developed in the case companies 1996-2005?
• How has the world changed over the same period as to EMA?
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Development of Requirements and Guidelines
• Legislation– 1996: Mainly local regulations
– 2005: EU’s increasing impact
• Stakeholder requirements– 1996: Some legislation
– 2005: Customers, environmental organisations etc.
• Voluntary guidelines– 1996: Work starting
– 2005: GRI, IFAC, EMS standards (ISO 14001, EMAS) etc.
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Case Companies
• Elisa Corp. = telecommunication solutions and services
• Fujitsu Services Ltd. = computer system installations and maintenance
• Kesko Food Ltd. = groceries trade
• VR Group = rail transport and supplementary services (road transport, track construction and maintenance)
Turnover Personnel1996 2004 1996 2004
Elisa Corp. 288 1 356 3 400 5 376Fujitsu Services Ltd. 317 256 1 784 1 544Kesko Food Ltd. 1 871 3 812 - 6 500 *VR Group 894 1 179 14 820 13 264*) The figure includes all the personnel of the Kesko Group.
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Case Results: Elisa Corporation
• Development work continued– Active role also in ETNO
• Information got lost when environmental manager was changed (2001 and 2004)
• In 2004 new EMA metrics but management support and resources still lacking– Not yet accurate– Used only for internal reporting
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Case Results: Fujitsu Services Oy
• Development work continued
• Environmental management finished along outsourcings but started later again at the logistics and configuration center– ”Not value-adding elsewhere”– ”Not causing but decreasing environmental impacts”– Annual objectives and metrics– Internal reporting
• No requirements from Fujitsu Group!
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Case Results: Kesko Food
• Continuous development– Exemplary logistics EMA system– Challenges from changing IT systems– 2005-2006 new CSR accounting system built for the
whole group– Internal and external reporting
• CSR in the corporate strategy Best in the retail sector in the world (Dow Jones Sustainability Index 2006)
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Case Results: VR Group
• Pilot models abandoned as too laborious but own practices developed– Pressure from legislation and big customers, lobbying– Internal and external reporting
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Summary of Case Results
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1
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3Basis on ow n processes
Resource usage
Impact assessment
Environmental costs
Accuracy
Comparability
Clarity
Life-cycle thinking
Integration to other accounting
Utilization of results
Personnel commitment
Debate across organization
Links to stakeholder needs
Utilization of guidelines
Elisa
Fujitsu S.
Kesko F.
VR
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Conclusions
• Gap between existing know-how and corporate practices
• Biggest challenges:– Lacking management support and resources
– Changes in IT systems or responsible personnel
– Expansion of businesses and globalisation
– Added value not found
• However, requirements are continuously tightening sustainable management and accounting
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Thank you!
Anna Kumpulainen (M.Sc) Tel: +358 41 5458859Tuula Pohjola (Dr.) Tel: +358 50 5113703
Helsinki University of TechnologyDepartment of Industrial Engineering and Management
Environmental and Quality Management UnitP.O. Box 5500, FIN-02015 TKK, Finland
http://emu.tkk.fihttp://emu.tkk.fi/eman2007
Organiser of the EMAN 2007 Conference!