ACCOUNTING FOR SUSTAINABILITY

REACTION PAPER
“Environmentral Management Accounting”

Group 8
DINDA TRIA LESTARI (1510534009)
BERTHA MUHAMMADSYAH (1510534022)
CICILIA SHANTI S (1510534035)

Environmentral Management Accounting is “an environmental and economic performance

management through the development and implementation of appropriate environmental accounting
and practice systems”. The important thing to note is that EMA focus is not entirely purely financial,
but also includes cost versus benefit considerations when purchasing materials from more
environmentally friendly suppliers, choosing blue energy usage, public image of the company due to
environmental violations such as water pollution, emissions waste gas, waste and waste management.

Environtment Management Accounting is already worth applying. Because there are many
advantages if a company does that. Among them is EMA can save business expenses. The impact of
environmental issues on production costs is often not expected. It is described as an iceberg that can
sink the speed of the ship. EMAs can help to identify and analyze hidden costs, such as waste
minimization costs that include only the costs of incineration and waste disposal, but also include
material, operational, and labor costs.

In addition, EMA can also help decision making. Profitable decisions should be based on
important information. EMA assists decision makers with important information about additional
costs caused by environmental issues. EMA reopens the cost of specific products and processes that
are often hidden in the overhead cost of the business / activity

EMA can also improve economic performance and business environment. There are many
positive ways to improve business / activity or organization performance, such as clean technology
investments, waste minimization campaigns, introduction of air pollution control systems, etc. Of the
many ways, which one is profitable? In order to identify such devices in increasing the profitability of
businesses / activities by lowering the environmental impact of products and production processes,
EMA provides a mutually beneficial solution. Business / activity is expected to have better
performance both on the economic and environmental side.
Role And Benefits Of EMA :
• Annual environmental cost assessment
• Product price
• Budgeting
• Investment valuation, calculating investment options
• Calculate the costs, savings and benefits of environmental projects
• Design and implementation of environmental management systems
• Evaluate environmental performance, indicators and benchmarking
• Set measurable performance targets
• Implementation of clean production technology, pollution prevention, supply chain management and
design for environmental projects
• External disclosure for environmental, investment and liability expenditures
• Sustainability reporting for external parties
• Environmental data reporting to statistical agencies and government institutions

In order for various environmental initiatives to be met, the most important thing is the
commitment of the top management. The main thing to understand is that EMA also assists
management in identifying hidden environmental costs that can be traced, evaluated and examined as
part of environmental targets.

EMA has many benefits in its practice. However, in practice there are still many challenges
that must be faced. With the existence of environmental management accounting is expected company
apply EMA policy correctly and consistent.

There are several reasons we pro with the Enviromental Management Accounting, namely:
1. Environmental Management Accounting helps companies in environmental issues by recording all
of their production activities to be reported in the company's environmental cost report.
2. Environmental Management Accounting can be used as a benchmark in environmental
performance.
3. By managing the corporate environment effectively and efficiently, the company can assist in
sustainable development so that customers can consume environmentally friendly products.
4. Employees can work in a conducive situation, low corporate capital costs, low health insurance
costs, and people can live healthy.