Theoretical developments in environmental management accounting and the role and importance of MFCA

Doorasamy, Mishelle Article Theoretical developments in environmental management accounting and the role and importance of MFCA Foundations of Management Provided in Cooperation with: Faculty of Management, Warsaw University of Technology Suggested Citation: Doorasamy, Mishelle (2015) : Theoretical developments in environmental management accounting and the role and importance of MFCA, Foundations of Management, ISSN 2300-5661, De Gruyter, Warsaw, Vol. 7, Iss. 1, pp. 37-52, https://doi.org/10.1515/fman-2015-0024 This Version is available at: https://hdl.handle.net/10419/184588 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0 Foundations of Management, Vol. 7 (2015), ISSN 2080-7279 DOI: 10.1515/fman-2015-0024 37 THEORETICAL DEVELOPMENTS IN ENVIRONMENTAL MANAGEMENT ACCOUNTING AND THE ROLE AND IMPORTANCE OF MFCA Mishelle DOORASAMY Durban University of Technology, Department of Financial Accounting, Durban, South Africa e-mail: [email protected] Abstract: Environmental Management Accounting (EMA) is a broader concept of accounting which uses accounting tools and practices to support company-internal management decision making on environmental issues and its impact on company performance. Research on EMA can be divided into two broad categories: theoretical and empirical studies. The theoretical studies based on framework that aim to explain the nature of the relationship between economic and environmental performance and the adoption of Environmental Management Accounting in a business environment. The empirical studies follow two lines of research, instrumental studies aim to empirically test the relationships hypothesized in theoretical studies; descriptive studies are intended to examine the factors that encourage the adoption of EMA. This review paper examined the role of MFCA in identifying non-product output (waste) and its impact on an organisations profitability. Various case studies are examined in this article that demonstrates MFCA to an important environmental management tool to ensure future sustainability of an organisation. Keywords: environmental management, material flow cost accounting, economic and environmental performance, sustainability, profitability. 1 Introduction Although environmental accounting forms an important part of industrial decision making in first world countries, there is however a lack of commitment to the environment in South Africa (De Beer and Friend, 2006). Environmental assessment (EA) is an integral component of environmental regulatory systems in developing countries like South Africa. It is one of the most important emerging trends in national environmental legislation. The EA process can contribute to effectiveness of the environmental regulatory system by integrating environmental considerations into the planning and appraisal of development activities. It can contribute to an improvement in environmental performance and cost effectiveness of the environmental regulatory systems. The concept of EMA is not clear to many individuals in an organisation and is conceived as a system that merely monitors and reports environmental costs. Jasch (2008:4) argues that “Doing environmental management accounting is simply doing better, more comprehensive management accounting, while wearing an “environmental” hat that opens the eyes for hidden costs.” It should be noted that management of environmental-related costs is important even before reporting them. Hence, environmental and financial performance is managed and improved by adopting an EMA system (Schaltegger et al. 2010:47). However, EMA adoption is still slow and lagging. Managers are reluctant to invest large amounts of money unless they are made aware of the amount of money they could save by adopting cleaner production techniques and technologies. This article discusses the underlying concepts of EMA, CP and MFCA and provides empirical evidence and case studies on the benefits of using MFCA as an environmental tool to identify the “true” value non-product outputs that managers need to consider during decision making. 2 Theoretical review of EMA 1) Environmental cost identification Environmental changes and future threats can generate higher costs to the company. Strategic operational issue is that companies are not aware of the magnitude of these costs as they are generally hidden in overhead accounts. 38 Mishelle Doorasamy Greater transparency of these costs being managed in a way that resulted in environmental and economic benefit (Olson and Jonall 2008). Initially the reaction to environmental challenges was to disperse pollutants better to reduce its harmful impact on communities, thereafter environmental management paradigm was to implement measures to control pollution and treat wastes after they have been created. Examples include effluent treatment plants, catalytic converters and waste incineration, also referred to as end-of-pipe technologies (Environmental strategies 2013). Jonall’s research was a review of academic journal articles that focused on environmental management accounting methodology that could be used to support decision making in companies. Corporate environmental cost as revealed by research, were twice as high as the environmental costs that were disclosed by companies in their annual reports. Abdel-Kader (2011:63) asserts that the first publications on EMA was the World Resources Institute’s “Green Ledgers” in which it had been argued that environmental related costs was significantly underestimated and frequently accounted for as general overheads. The fact that conventional income statements created a perception that environmental costs are limited to separately identified items such as fines and penalties, “end-of-pipe” pollution control equipment and expenditure to remediate past environmental damage, all of which are defensive expenditures, therefore any potential to improve environmental and economic performance by cost reductions, developing new revenues and managing risks are ignored, was clearly pointed out by AbdelKader (2011:64). Jasch and Schnitzer (2002:6) suggested that environmental protection projects aimed at prevention of emissions and waste at its source by more efficient use of raw materials are not recognized and implemented due to the fact that environmental costs not being accurately recorded resulting in distorted calculations for improvement options. It had been discovered subsequently that many of the businesses’ costs are environment-related and that simple actions could be taken to improve environmental and business performance. This has led to an increase in the number of publications to create awareness among practitioners. To overcome these challenges, the American healthcare multinational Baxter Inc.’s published Environmental Financial Statement (EFS) as a subset of the company’s overall income statement to calculate the aggregate costs and benefits arising from their environmental program. Abdel-Kader (2011:64-65) confirmed that the EFS generally showed positive financial contributions whilst adhering to legal compliance. Environmental Cost Accounting Guidelines were introduced by the Japanese government defining environmental costs into six different types to encourage companies to publicly report these costs with the hope that this will assist in more informed decision making among managers. Jonall (2008:29) mentioned in his review of corporate results that when EMA methodology was applied at a Canadian Mackenzie Paper Division paper mill, environmental costs were found to be more than twice as high as those reported in the company’s year-end report. This concludes that many important environmental costs are hidden in other accounts and supports the view that environmental costs are higher than generally perceived by management. However the respondents from the company were unhappy about the findings and questioned the reliability of EMA methodology rather than the company’s operational performance. The results of the case was concluded reporting that established accounting practices needed to be evaluated because it is suspected that it may be unintentionally supporting polluting technologies (Jonall 2008:32). The United Nations development program as part of the Department of sustainable Development reports EMA as an important management tool that is of benefit to both industry and government. They (UNEP) have embarked on several activities to educate and encourage companies of the benefits of using EMA. Some of which was the following: being part of the expert working group on EMA which introduced the international guidance and also developing training course in EMA. Following these international developments, South African companies have considered environmental issues in their decision making processes regarding products and processes. It has been suggested that EMA is a valuable tool for businesses to adopt whilst re- Theoretical Developments in Environmental Management Accounting and the Role and Importance of MFCA 39 sponding to environmental challenge and still focusing on the triple bottom line (Ambe 2007:7). What had been brought to the fore front was the potential savings to South African companies by implementing good environmental management by using EMA to accurately trace and identify environmental costs (Ambe 2007:11-12). Environmental Accounting can be used to demonstrate the potential for environmental investment to yield financial. A pilot testing project of Environmental Management Accounting on 10 case studies conducted by Jasch and Schnitzer (2002:6) showed that there is clearly lack of communication between the environmental manager and cost accountant in companies. The environmental manager has limited access to actual cost accounting documents and although the cost controller has most of the information, they lack the ability to separate the environmental part without proper guidance. Environmental Management Accounting is a combined approach to bridge this communication gap and provide for the transition of data from cost accounting and financial accounting to reduce environmental impact by increasing material efficiency. Similar findings were reported by Albelda (2011:76-100) who explored the role of management accounting practices as facilitators of the environmental management. The results showed that by reinforcing the four significant EMA’s elements: commitment to continual improvement of environmental performance; compliance with environmental legislation; communication with stakeholders; and employee involvement, management accounting practices operate as a facilitator mechanism for environmental management. Poor communication links between the accounting and technical departments result in inaccurate cost allocation, which eventually leads to managers making incorrect operational and investment decisions. This ultimately has inverse impacts on a company’s environmental and financial performances. It had been discovered subsequently that many of the businesses’ costs are environment-related and that simple actions could be taken to improve environmental and business performances (Jasch and Schnitzer 2002:6). 2) Framework of EMA Cost allocation by EMA could result in the following benefits (Introducing Environmental Management Accounting at Enterprise Level: 9). Jasch (2003:667676) claims that this comprehensive framework for EMA ensures that all relevant and significant costs are considered during decision making:  pricing of products could change due to recalculation of costs,  profit margins of products could be re-evaluated,  decision to phase out products because of high environmental cost,  processes and procedures may be re-designed to reduce environmental cost; and  continuous monitoring of environmental performance and good housekeeping measures implemented,  unnecessary costs are eliminated. Framework for EMA proposed by Burritt et al. (2002) on categories of different EMA methods based on the attributes of the information and the uses to which the information is to be applied. The 16 categories in which different EMA methods can be positioned and understood in terms of their purpose and data source are demonstrated in the table below (Bennett, Schaltegger, Zvezdov 2013) The Table 1 above explains the categories of EMA information generated as follows:  information is monetary and non-monetary (physical),  measure past performance or to make decisions for the future,  distinguished between decision involving strategic information over several years and more operational information covering shorter time period,  how routinely the information is provided regularly for a recurring purpose or on an ad hoc basis for a specific non-recurring need. 40 Mishelle Doorasamy Table 1. Categories of EMA (source: Burritt R.L., Haun T., and Schaltegger S., 2002:43) Time Type of report Physical short-term Physical long-term Monetary short-term Monetary long-term past-oriented routinely generated x x x x ad hoc x x x x future-oriented routinely generated x x x x ad hoc x x x x During a study conducted by Ambe (2007:7), external factors influencing EMA adoption were discussed, as follows:  increased stakeholder pressure concerning environmental issues,  greater need for integration of physical and financial aspects of environmental management,  combined financial, environmental and social consideration incorporated into concepts of sustainable development and corporate social responsibility, and  greater environment-related costs. Monetary EMA methods rely on corresponding physical information about materials and energy flows and are past-oriented. This type of information can provide managers with an overview of inefficiencies in material and energy usage which is useful in identifying and analysing potential improvement opportunities. Bennette, Shaltegger and Zvezdov (2013) reported that past-oriented information is found most often in businesses. However, once managers become aware of opportunities for efficiency improvements and other benefits, then futureoriented information will also be needed. Firms will thus be able to achieve first mover advantage by being proactive in strategic planning. It would be up to management to decide which tools would best suit their information needs. Hyrslova (2011:47) states that within the EMA framework, it is necessary to analyse the individual activities and processes to prepare material and energy balances in order to understand waste flows and express these flows in monetary units. According to EMA any waste generated is a sign of inefficiency. Therefore it can be concluded that an EMA system provided much more valuable information to support decision making within an organisation than a traditional management accounting system. The concept of EMA is not clear to many individuals in an organisation and is conceived as a system that merely monitors and reports environmental costs. It should be noted that management of environmental related costs is important even before reporting them. A sound EMA system is required to ensure that environmental issues that adversely affect businesses are not ignored. Environmental and financial performance is managed and improved by adopting an EMA system (Schaltegger et al. 2010). 3 Tools of Environmental Management Accounting 1) Development of Material Flow Cost Accounting (MFCA) MFCA is a powerful method of environmental management and is being disseminated to industries because of its potential to help organisations realize that by increasing the transparency of material losses, companies can reduce environmental impacts and improve business efficiency. Japan then took the leading role wishing to make a contribution to the world by making both environment and economies compatible through dissemination of an advanced environmental management accounting approach. As a result, ISO/TC207/WG8 (MFCA) was established in 2008. Theoretical Developments in Environmental Management Accounting and the Role and Importance of MFCA 41 The effectiveness of Japanese MFCA best practices and successful case examples was communicated after ISO 14051 (international standardization ofMFCA) was issued in 2011. MFCA was first developed in Germany but has since been adopted in Japan. It involves the detailed mapping of the material and energy flows through an organisation, however the costs of wasted materials (non-product output) are not absorbed into product costs but are identified and reported separately at all stages (Abdel-Kader 2011:67-68). MFCA was developed as a tool to enhance material productivity in manufacturing operations. This process gained widespread significance as it was used in Japan andbecame evident as a useful tool to evaluate the loss of material in both physical and monetary units. Due to great pressure being placed on organisations to improve their economic and environmental performance and also considering the large cost of raw material inputs, MFCA was established as an official international standard for organisations, ISO14051. This method was applied by manufacturing companies to assess the loss of materials through inefficient use of resources and to identify possible savings that could bring about economic and environmental benefits (Schmidt and Nakajima 2013). MFCA is a key management tool with an objective to manage manufacturing processes with regard tothe flows of materials, energy, and data to ensure that the manufacturing process proceeds efficiently. Hyrslova` et al. (2011:5-18) defines material losses that occurs during the course of corporate processes as an inseparable part of material flows (examples, defective products of poor quality, scrap, waste and damaged products. These material residues are economically and environmentally undesirable. Emphasis of this approach is on the transparency of material flows and on related costs. Focuses on measures that aim to identify areas of cost saving by reduce material consumption and waste disposal. In an article published by Schmidt and Nakajima (2013), it had been found that the volume of production waste excluding air and water is as much as a quarter in quantity. Production waste of German companies in 2011 was higher than product waste in 2010 by 1.54 million tons (use model on page 359). Hyrslova` et al. (2011:5-18) reported findings of a company that manufactures ceramic tiles that adopted MFCA approach to their entire production process to identify material losses in quantity and value. It had been established that the MFCA system provided important data for the optimization of the company’s manufacturing processes. 2) Definition and Theoretical Framework of MFCA Schaltegger et al. (2010:397) describe MFCA as one of the EMA tools aimed to reduce both the environmental impact and cost simultaneously. In addition, MFCA is also a tool used in organizations’ decisionmaking which is aimed at improving their business productivity by reducing costs through waste reduction. MFCA measures the flow of raw materials in both physical and monetary units. Cost categories are material cost, energy cost, system cost and waste management cost (Schmidt and Nakajima 2013:358369). According to Schmidt and Nakajima (2013:358369), a large number of companies are introducing MFCA in Japan which is aimed at reducing material losses rather than recycling wastes. Reduced material input and material cost directly results in reduced waste generation. This eventually leads to improved efficiency in processing and waste treatment costs. Hence, two key activities of environmental management are reduction of waste generation and resource consumption in order to lower the environmental impact of the manufacturing process. MFCA identifies the source of waste generation as well the quantities and costs of waste generated from a process. Furthermore, MFCA can be seen as an effective management tool used to help management to better understand the environmental aspects and profitability by improved material productivity and cost reduction. MFCA traces and calculates both the physical and monetary values of material flows for products and wastes (Material flow cost accounting MFCA case examples 2010). Abdel-Kader (2011:67-68) claims that MFCA is a powerful method of environmental management and was being disseminated to industries because of its potential to help organisations realize that by increasing the transparency of material losses, 42 Mishelle Doorasamy companies can reduce environmental impacts and improve business efficiency. He goes on to describe the process as involving the detailed mapping of the material and energy flows through an organisation. Hyrslova` et al. (2011:5-18) define material losses that occur during the course of corporate processes as an inseparable part of material flows, for example, defective products of poor quality, scrap, waste and damaged products). These material residues are economically and environmentally undesirable. However, the costs of wasted materials (non-product output) are not absorbed into product costs but are identified and reported separately at all stages. MFCA was developed as a tool to enhance material productivity in manufacturing operations. This method was applied by manufacturing companies to assess the loss of materials through the inefficient use of resources and to identify possible savings that could bring about economic and environmental benefits (Schmidt and Nakajima 2013). Scavone (2006:1276-1285) had similar findings and adds that the aim of adopting this methodology is to successfully reduce material inputs and to achieve new measures for increasing overall efficiency which will eventually lead to positive economic and environmental improvements. Jasch (2009) goes a step further to claim that the most remarkable development on a methodological level, in the area of environmental management, has been MFCA which has influenced companies and regulators as far as Japan. Scavone (2006:1276-1285) argues that MFCA is an adequate methodology to achieve better data and improve efficiency of production systems which lead to not only lower costs of actual material used but also to lower costs in material handling and waste disposal. Thus, material flows become more transparent, as explained previously by other authors. Bierer and Gotze (2011:3) explain that material loss cost can be calculated by multiplying quantity of each material (Physical amount in kg) by their unit prices. Even though external recycling may assist in recovering some material cost, material loss cost is still significantly higher. Lagioia, Tresca, and Gallucci (2014) studied the adoption of MFCA adoption to integrate physical and monetary data in small enterprises for waste reduction decisions. They found that environmental impacts are not correctly recorded using traditional accounting systems and this lead to inaccurate decision making. Strategic, informed decision making is a key to an organisations success and this is highly influenced by the availability of an integrated data management system. This pilot test was conducted on a small Italian enterprise producing rubbish bags and operating in the plastic sector. MFCA was used to verify and assess the efficiency of the production process. However there were some problems experienced by the research team in applying the MFCA methodology. The company, being an SME had a traditional accounting thinking, which focused mainly on monetary information with a lack of clear flow chart of the production process in physical units. Both organisational and accounting difficulties were experienced in applying the MFCA methodology. Based on the company’s financial sheets and the existing literature, assumptions and estimates had to be done. Aim was to establish the economic value of the physical amounts associated with the manufacturing process in order to show the economic value of material losses. Considering the economic downturn, this could allow to reduce losses, to avoid considerable costs, reorganizing and optimizing better the management of the material flow process. Also the decision to invest in cleaner production technology could be influenced by the findings of this research. Once again it had been concluded that MFCA is a powerful tool that organisations could adopt to identify physical and monetary hidden flows which will lead to environmental and economic decision making. Economic loss caused by material losses includes all input costs of the process, such as energy, labour, depreciation, and material cost. MFCA assists the organisation in identifying, analysing and evaluating their economic loss by material loss. Theoretical Developments in Environmental Management Accounting and the Role and Importance of MFCA 43 Figure 1. The figure below represents the most important benefit of MFCA (source: self-generated) Material flow cost accounting (MFCA) case examples (Ministry of Economy, Trade and Industry of Japan 2010) provides information on limitations and benefits of MFCA implementation:  There were certain limitations related to MFCA application as follows: - operational control of collecting MFCA information for quantification and incorporating it as part of daily activities, - need for an interface for linking a cost management system with a daily report, and - coordination with ISO 14001activities.  Challenges of MFCA: - daily report improvement, - data collection method, - communication barriers between management and on-site workers. 3) Benefits of MFCA The Fig. 1 represents the most important benefit of MFCA and shows that MFCA helps companies to identify and quantify their non-product output (material losses) by increasing the transparency of material losses throughout the process. This enables management to identify problem areas and implement measures to improve process efficiency. This information was identified during analysis of the case examples provided. 4 Case studies on MFCA Application MFCA has been adopted in many case studies and resulted in environmental and economic benefits for the organisation. Some of these cases have been cited below. MFCA was carried out as a test project at a Japanese firm, Canon, on their lens production process with focus on the grinding process. Conventional accounting revealed 1% loss on defective products, however after the application of MFCA, it became evident that a large part of the costs was due to material losses of defective products. Approximately 32% of the process costs could be allocated to material loss. Following the successful implementation of MFCA, the approach was adopted at 17 Canon plant sites in Japan and abroad resulting in a total saving of 5.1 billion yen, equivalent to US $ 51 million, between 2004 and 2012. This saving was mainly due to more efficient use of resources resulting in improved economic and environmental performance. It was also found that between 20% to 30% of costs are actually non-product output costs. MFCA enabled the companies to identify material losses that was previously hidden in their production processes. MFCA uses quantities and costs to make material loss "visible" Problem identification Opportunities for improvement 44 Mishelle Doorasamy It is evident that cooperation with suppliers, data exchange and high measure of trust between companies is important and a pre-requisite for the successful implementation of MFCA approach (Schmidt and Nakajima 2013:358-369). In a case study of Shinryo Co. Ltd, MFCA was applied to the processes from producing to packaging of brown sugar products. The results and findings were reported in the booklet that was produced by the “FY 2009 International Standardization of LowCarbon Environmental Management Accounting” committee, commissioned by the Ministry of Economy, Trade and Industry, Japan (2010). MFCA data were defined as follows:  material costs: all input materials,  waste management cost: waste management cost for raw-sugar paper bags added to the calculation,  energy cost: electric power and heavy oils cost,  system costs: personnel, depreciation, and maintenance /repair cost. MFCA analysis found that:  off-specification products accounted for 5% of overall products; however they did not incur any material losses, just losses such as system costs and energy consumption,  losses from dropped products and others comprised of % of overall products,  losses from packaging materials were a significant cost; improvement based on MFCA analysis was operational improvement and loss reductions by reducing relevant cost down to a reasonable level: packaging waste reduction option was changing to less costly materials, rather than prioritizing the quality; this will reduce costs and result in better customer satisfaction due to less waste for customers. MFCA analysis identified minor improvement measures that could generate benefits such as improved productivity, more efficient use of resources, better customer satisfaction, reduced material loss and lower costs. In the case study of Kodai Sangyo Co., Ltd, MFCA was targeted towards the project processing wooden materials for home-use “drain boards”. MFCA application showed that there had been 33% of material loss in mill-ends and swarf came from the material length of purchased material that was based on specific product design. At the conclusion of the case study, it had been found that information from three sources, that is, “sales management system”, “accounting system”, and “production management system” would be required for the establishment of the MFCA management system increased the transparency of the flow of material losses in the process, and also improved the company’s business performance. During the last decade the importance of effective material flows, have increased significantly. Companies however require access to a measurement system to measure and compare material flows and costs in order to identify potential savings. In another article published by Schmidt and Nakajima (2013), it had been found that the volume of production waste excluding air and water is as much as a quarter of total quantity used. Production waste of German companies in 2011 was higher than product waste in 2010 by 1.54 million tons (use model on page 359). Hyrslova’ et al. (2011:9-16) applied MFCA, a tool for the optimization of corporate production processes in a ceramic tile manufacturing company. He discovered that costs associated with material losses was approximately 86 million CZK. A recommendation based on MFCA calculation, for the company to mainly concentrate on the processes taking place within the quantity centre. Preparation of material, as this was where majority of material losses occurred. Conclusions drawn from this case was that MFCA method contributed significantly to the development of new technologies which eliminated deficiencies of traditional technological processes by reducing the quantity of material losses wherever possible. MFCA application increased the transparency of material losses and highlighted saving opportunities in the case studies cited. Hence, it provided useful information to assist management decision making regarding the introduction of new technologies. The need for efficient use of resources due to its increasing cost may to an extent encourage organisation to adopt MFCA approach to identify saving opportunities. Theoretical Developments in Environmental Management Accounting and the Role and Importance of MFCA 51 Governments, environmental support groups and other regulatory organizations need to promote and encourage EMA adoption in various industries. EMA implementation remains a “niche” in South Africa as organisations are reluctant to adopt new systems unless they are compelled to do so as a regulatory or legislative requirement. 8 References [1] Abdel-Kader G.M. (2011) - Review of Management Accounting Research. United Kingdom. Palgrave Macmillan (63-65). [2] Albelda E. (2011) - The role of management accounting practices as facilitators of the environmental management: Evidence from EMAS organisations. Sustainability Accounting, Management and Policy Journal (online), 2(1):76100. Available: http://www.emeraldinsight.com/journal.htm (accessed 9 June 2014). [3] Ambe M.C. (2007) - Environmental Management Accounting in South Africa. Status, challenges and implementation framework. D. Tech. Tshwane University of Technology. [4] Bennett M., Schaltegger S., Zvezdov D. (2013) - Exploring Corporate Practices in Management Accounting for Sustainability (online), 1-56. Available: http://www.icaew.com/academic (accessed 15 March 2014). [5] De Beer P., Friend F. (2006) Environmental accounting: a management tool for enhancing corporate environmental and economic performance. Ecological Economics, 58 (3): 548-560. [6] Domil A.E., Peres C., Peres I. (2010) - Capturing environmental costs by using activity based costing method. Economic Science Series (online), 719-721. Available: http://www.ceeol.com (accessed 10 October 2013). [7] Environmental Strategies (online). (2013). Available: http://www.unido.org/en/what-wedo/environment (accessed 18 March 2014). [8] Hyrslova’ J., Vagner M., Palasek, J. (2011) - Material Flow Cost Accounting (MFCA)- Tool For The Optimization of Corporate Production Processes. Business, Management and Education 9(1): 5-18. [9] Japanese Industrial Standards committee (2007) - International standardization committee for Environmental Management Accounting. Preliminary proposal for the International Standardi-zation of Material Flow – Based Environmental Management Accounting for ISO TC 207: 1-3, 10-11. [10] Jasch C. Schnitzer H. (2002) - Environmental Management Accounting. How to profit from environmental protection. EMAenvironmental management accounting pilot testing. [11] Jasch C.M. (2008) - Environmental and Material Flow Cost Accounting - Principles and Procedures. Eco-Efficiency in Industry and Science, 25. Heidelberg: Springer-Verlag. [12] Jonall P. (2008) - Environmental Management Accounting (EMA), Management Accounting including Environmental Management: 2. [13] Khalid F.M., Lord B., Dixon R. (2012) - Environmental management accounting implementation in environmentally sensitive industries in Malaysia. 6th NZ Management Accounting Conference. University of Canterbury, New Zealand. [14] Ministry of Economy, Trade and Industry of Japan (METI) (2010). Environmental Management Accounting: MFCA Case Examples; METI: Tokyo, Japan. [15] Olson O., Jonall P. (2008) - Environmental Management Accounting (EMA), Management Accounting including Environmental Management – a literature review. [16] Scavone G.M. (2006) - Challenges in internal environmental management reporting in Argentina. Journal of Cleaner Production (online), 14:1276-1285. Available: http://www.sciencedirect.com (accessed 23 October 2013). [17] Schaltegger S., Bennett M., Burritt R.L., Jasch C. (2010) - Eco-efficiency in industry and science. Environmental Management Accounting for Cleaner Production. 5 th edition. Springer Science and Business Media. UK. [18] Schmidt M., Nakajima M. (2013) - Material Flow Cost Accounting as an approach to improve resource efficiency in manufacturing com- 52 Mishelle Doorasamy panies. Resources (online), 2:358-369. Available: http://www.mdpi.com/journal/resources (accessed 13 March 2014). [19] Sygulla, R., Bierer, A., and Goetze, U. (2011). Material Flow Cost Accounting – Proposals for Improving the Evaluation of Monetary Effects of Resource Savings Process Designs. 44th Conference on Manufacturing Systems (online). Wisconsin, USA.