Environmental Management Accounting Standard Turns Waste into Gold

Increase productivity while reducing environmental impact

Published: Wednesday, March 28, 2012 - 10:05

(ISO: Geneva) -- The international standard, ISO 14051:2011—“Environmental management—Material flow cost accounting—General framework,” assists organizations to better understand the environmental and financial consequences of their material and energy use practices, so that they can identify opportunities for improvement.

ISO 14051, from the International Organization for Standardization (ISO), establishes a management information system approach called “material flow cost accounting,” which can be used to trace and quantify material input and output flows and stocks within an organization. The system helps identify material and energy use practices, and understand these in costs and physical terms. The information can then be applied to reduce losses and increase gains.

“Many organizations are unaware of the full extent of the cost of their material losses because these data are often difficult to extract from conventional information, accounting, and environmental management systems,” says Katsuhiko Kokubu, convenor of the working group that developed the standard. “Material-flow cost accounting produces such precise and clear data that it can motivate managers to enhance material productivity and significantly reduce unnecessary waste far more effectively than through conventional means.

“The bottom line is that not only do organizations increase profits, but they also improve their environmental performance and contribute to sustainable development,” adds Kokubu.

Material-flow cost accounting is applicable to all industries that use materials and energy, including extractive, manufacturing, service, and other industries. It can be implemented by organizations of any type and scale, with or without environmental management systems in place, in emerging economies as well as industrialized countries.

Material-flow cost accounting is one of the major tools of environmental management accounting and is primarily designed for use within a single facility or organization. However, it can be extended to multiple organizations within a supply chain, to help them develop an integrated approach to more efficient use of materials and energy.

ISO 14051 was developed by ISO technical committee ISO/TC 207, Environmental management.

ISO 14051 is available from ISO national member institutes (see the complete list with contact details). It may also be obtained directly from the ISO Central Secretariat through the ISO Store or by contacting the marketing, communication, and information department.

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The International Organization for Standardization (ISO) is the world’s largest developer and publisher of international standards. ISO is a network of the national standards institutes of 162 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a nongovernmental organization that forms a bridge between the public and private sectors. ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society. View the ISO Standards list.