MANAGEMENT ACCOUNTING CARBON EMISSION:
Management Accounting Carbon Emission
The activities of larger cooperates such as Macdonald Australia Limited and Toyota Australia could also have new services and products developed to curb climate change and other climate effects of the organization be established effectively if the managers have pertinent information regarding carbon dioxide (CO2). These two corporations have independently gotten recognition from their sound sustainability and effective sustainability reporting. With their outstanding sustainability practices, these organizations would also be anticipated to be the leading in reporting, collections, assurance, awareness, and application of carbon related information as (Rappaport 2005) observed.
According to (Schaltegger, Burritt, & Petersen 2003), traditional management accounting of these firms have a focus on the dissemination and collection of financial representation of the environmental effects of the organizations and these companies grown in significance due to the establishment of systems of emissions trading. Within the wider setting, emissions reduction revenue, costs of curbing environmental effects, monetary investments linked to greener products and cleaner production all offer the need for financial information in making decision. From the standpoint of environmental management, the results indicate that avoidance and reduction in CO2 emissions for compliance gives the major concern regarding these companies’ managed carbon practices. Some of these information are physical in their measurement or orientation and thus, could be reflected for instance by the eco-balances, carbon footprints, targets for carbon emission reduction expressed in relative and absolute terms, and actual reductions and emissions in relations to the trends or plans overtime.
A lot of accounting concerns are linked to the physical data need; however, studies give evidence that fiscal quantification plays a similar significant role in reference to climate change data and information. For example commitments of carbon reduction require business (education, training or technology) so that the actual emission reduction is usually directly connected to the volume of resources invested, in which case, these resources are stated in fiscal units. These two organizations whose operations are directly linked to emission of carbon and thus, the law require them to give a comprehensive emission report, gather data from physical units as Rappaport (2005) suggested. The physical units do not just serve the purposes of regulatory reporting but are also keyed into the systems of performance measurement which develop key performance indicators of the organizations performance in absolute provisos. This physical information is then translated into capital units so as to sustain the management decisions linked to resource allocation, planning and costing.
Information from these two corporations indicate that physical information is more or less retained for bookkeeping functions and is hence available when no carbon or environmental management section is formally accountable for the management of such materials. For instance, comprehensive data linked to the energy consumption is collected by the department of accounting in all the two firms. The information has been applied to deliver an account of the operation costs and is given to the facility supervisors and other line managers on frequently.
Rappaport A. (2005), The economics of short-term performance obsession, Financial Analysts Journal, Vol. 61 No. 3, pp. 65-79.
Schaltegger, S., Burritt, R. and Petersen, H. (2003), An Introduction to corporate environmental management, Greenleaf Publishing, Sheffield.