Reading3 ENVIRONMENTAL MANAGEMENT

17 Environmental management accounting Kazbi Soonawalla

Many companies consider productivity to be a cost-saving operational issue. We at
DuPont have elevated productivity to the strategic level because we believe that it is central to our eVorts in sustainability.
(Chad Holliday, Chairman and CEO of DuPont1)

17.1 Introduction
Environmental accounting and management has had a growing public proWle over the last three decades. Its cause has been helped along by disastrous industrial accidents, such as the lethal gas leak at Bhopal in 1984 and the Exxon Valdez oil spill in Alaska in 1989. Other events such as Shell’s dilemma on disposing the oil rig Brent Spar mid-ocean received a lot of media attention. Public awareness of the harmful eVects of industrial accidents, as well as the routine pollutants entering our water, air, and soil, coupled with increasing media coverage of these issues, has forced corporations to address calls for environmental prudence. Climate change, nuclear waste, and deforestation are commonplace concerns, especially as they begin to aVect the health of those in the vicinity. The increased awareness of environmental factors is coupled with a growing acknowledgement of the paucity of clean resources.
Demand for better business practice from shareholders, non-governmental organizations
(NGOs), and other public interest groups is shaping a body of practices referred to as
‘environmental management accounting’ (EMA), which is of particular interest to not just large but small corporations also. Media and public opinion inXuence and inform government policy as well. Countries that are perceived as failing to take the threat of global warming and environmental pollution seriously are increasingly criticized and condemned
(see e.g. Economist, 5 April 2001).
Through the 1970s and 1980s, the environment became an important stakeholder, inXuencing and being inXuenced by corporate action; the other stakeholders being people and interests that

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