Acc Accou ount nting ing for or Sust Sustaina ainabili bility - PowerPoint PPT Presentation

SESSION 4: Acc Accou ount nting ing for or Sust Sustaina ainabili bility ty By Nuwan Gunarathne Lecturer, Department of Accounting, University of Sri Jayewardenepura

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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: Accou Accounting nting for or Su Sust stainabilit ainability Environmental Management Accounting (EMA) Identification, collection, analysis and use of Physical information on Monetary information on energy, water and materials environment-related costs, (wastes) earnings and savings Users

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Types of EMA systems Physical EMA (PEMA) Monetary EMA (MEMA) expressed in physical expressed in monetary units units

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Comprehensive EMA Framework EMA Monetary EMA Physical EMA Short term focus Long term focus Short term focus Long term focus generated Routinely Past oriented infor Ad hoc infor generated Routinely Future oriented infor Burritt et al. (2002) Ad hoc infor

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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: Accou Accounting nting for or Su Sust stainabilit ainability EMA development stages Stage 3 - Environmental Stage 2 – Integration Realization Stage 1 - Compliance

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability Vision Compliance Conservation Integration  Focus on main items  Key stakeholder engagement  Selected EMA practices

SESSION 4: Accounting Accou nting for or Su Sust stainabilit ainability Vision Compliance Conservation Integration  Focus on main items  Comprehensive coverage  Key stakeholder engagement  All stakeholder engagement  Selected EMA practices  Inclusion in daily management (EKPIs)

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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: Accou Accounting nting for or Su Sust stainabilit ainability 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)

SESSION 4: Accou Accounting nting for or Su Sust stainabilit ainability 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

 Sustainability is a journey with lot of adventure  “Sometimes it's the journey that teaches you a lot about your destination”

Thank hank y you ou