Guide

Environmental management accounting to reduce costs

Introduction

Management accounts are an invaluable business tool. They provide an easy-to-understand analysis of the recent performance of a business, and usually include forecasts of future activities. The information is usually arranged so that the performance of different elements of the business can be assessed. Management accounts enable business decisions to be made on the basis of solid information to improve the chances of successful implementation.

Environmental management accounting is more specialised than this, concentrating on the costs of materials, energy, water and other resources, as well as those associated with the disposal of waste and effluent. Not all of the costs will be purely financial - they can include the effect of environmental impacts on the business' public image, or on its prospects for business with customers who are more environmentally conscious.

This guide shows how you can use environmental management accounting to identify costs and potential savings, and how it can be used to set targets and monitor performance.