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Technology:
Expert Working Group Meeting: Third Meeting, Bonn, Germany, 1-3 November 2000

Proceedings of the meeting/Programme presentations

Opening

Mr.  Hansvolker Ziegler opened the meeting on behalf of the German Federal Ministry of Education and Research and welcomed everyone to the meeting.

Mr. Peter Frans also welcomed the participants to the meeting and expressed the great interest of the German Federal Ministry of Environment, Nature Conservation and Nuclear Safety in EMA.

Mr. Ralph Chipman welcomed the participants on behalf of the United Nations and reviewed the conclusions of past meetings of the group as well as the agenda and goals for this meeting.

Colombia

Mr. Sergio Salas of the Colombian Environment Ministry reported on a recent project in Colombia in which an analysis similar to EMA was used to appraise investments in waste management for public hospitals in order for the government to set fee levels that the government would pay to incinerators.

This exercise was undertaken in order to develop policies to promote private investment in incineration services, which are non-existent in Colombia, and to create a new regulated market for incineration of waste from public hospitals. The exercise compared the costs of incineration vs. the costs of landfill disposal.

The group noted that some of the relevant accounting items in EMA were not used in this analysis and offered suggestions to Mr. Salas on how to improve the procedures.

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Germany

Mr. Alex Grablowitz of the Federal Ministry of Education and Research introduced the different activities under development in Germany. He also introduced the next two speakers.

Mr. Ralph Thurm of Siemens informed the group of the newly revised VDI 3800 Guidelines of the German Association of Engineers. He noted that in general statistics have appeared to show a decline in environmental investments by companies in Germany, but this is due to the fact that environmental investments were considered to include only end-of-pipe investments, and the majority of investments today are oriented towards pollution prevention. The VDI 3800 Guidelines are intended to assist companies in integrating environmental protection measures into EC statistics formats (EC 58/97, which refers to enterprise statistics).

The VDI Guidelines apply to investment costs, including production, product and other voluntary costs. The guidelines do not include the cost of externalities or investments in research and development. Other measures included are the cost of environmental management systems (EMS), remediation, communication, sponsoring and emissions trading. The group noted that the VDI Guidelines do not include calculations of the raw material value of waste.

Mr. Karl Schoer of the German Federal Statistics Office presented a review of the German government’s efforts to improve national environmental accounting efforts by using the United Nations System of National Accounts (SNA) and the System for Integrated Environmental and Economic Accounting (SEEA).

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Japan

Mr. Shinichi Goto of the Japanese Ministry of Environment presented an update on the implementation of Japan’s national EMA guidelines. The national EMA guidelines are a voluntary set of procedures and accounts intended for use by Japan’s industries. Mr. Goto described the new software developed to support this highly successful programme.

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Philippines

Ms. Maria Fatima Reyes is Chair of the Environmental Accounting Committee of the Philippine Institute of Certified Public Accountants (PICPA), which has 100,000 members and began work on environmental accounting issues in 1995. Among the PICPA programmes is a series of training courses that PICPA has developed in cooperation with the USEPA’s PRIME Project. These courses include a two hour course on “Introduction to Environmental Accounting” and a 2 day course on “Environmental Cost Assessment: profiting from cleaner production”.

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ISO 14000 Standards

Mr. Kim Christiansen of Sophus Berendsen (Denmark) is a representative of Denmark to ISO Technical Committee 207. Mr. Christiansen updated the group on recent developments in the ISO 14000 Environmental Management Standards and  provided his views on the applicability of EMA in EMS. EMA could be also be useful in alleviating concerns over the credibility of ISO 14000 certifications by providing accounting tools to assess impacts as described in the standards.

Mr. Christiansen also informed the group that a new discussion item and working group might be formed within TC 207 to address issues of communication. This discussion item is being sponsored by the delegations of Sweden and the United States to TC 207.

The group felt that this new discussion item and working group might present a very good opportunity to bring EMA concepts and principles into the ISO 14000 discussions.

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Federation of European Accountants (FEE)

Mr. Johan Piet, chairman of the Environmental Working Party of FEE, described the work that the FEE has been doing on corporate environmental accounting issues since 1993. The FEE has published several discussion papers which can be accessed at http://www.johanpiet.com. The FEE will continue to work in this area as well as on “non-financial accounting” which includes social and environmental externalities.

A proposal was made by Mr. Piet and agreed to by the group to link the FEE site to the Division for Sustainable Development site with information on  the group’s work on EMA. The Expert Working Group’s reports will be made available to the members of the FEE through its website.

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Excercise on EMA principles

Ms. Reyes, supported by Ms. Deborah Savage of the Tellus Institute, directed an exercise on identifying environmental costs with the participation of the members of the Group. This exercise helped to establish a common basis of understanding of environmental costs.

The exercise used data from a real company case in the Philippines under a fictitious name.  The company in the case study produces aluminum foil pouches for fruit drinks. A sample of the product as well as a diagram of the production and waste management processes was shown to the participants. The participants were asked to identify potential environmental costs as well as measures by which the company could reduce these costs.

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Review of the Draft Reports

Report 1: Environmental Management Accounting Metrics: Procedures and Principles

This draft report was prepared by Ms. Christine Jasch and sponsored by the Austrian Ministry of Transport, Innovation and Technology. The draft report explains  the concept of EMA and its application using standard corporate cost accounting procedures. It also addresses improved inventory accounting procedures. 

Following a presentation by Ms. Jasch, the group conducted a detailed review of each section of the draft report. The review included discussion of terminology and language in order to clarify the complex technical concepts contained in the draft report. 

The group agreed to use the term “financial environmental management accounting (FEMA) rather than “monetary environmental management accounting (MEMA) in order to avoid confusion with terms related to financial accounting for external reporting. 

The group suggested that more emphasis should be given to environmental benefits resulting from use of EMA and not just the financial benefits, which are addressed extensively in the draft. 

Other concepts discussed were the difference between environmental costs and environment-related costs as well as the difference between EMA as proposed in this report and conventional environmental cost accounting. These comments were used in revising the draft report for publication.

Report 2: Links between EMA and other Management and Accounting Systems

This draft report was prepared by Mr. Stephan Schaltegger, Mr. Tobias Hahn and Mr. Roger Burritt. The draft report was funded by the German Federal Ministry of Education and Research and Environment Australia. The report is to provide a general analytical approach for use by governments in developing policies to promote the use of EMA in industry. It explores the links between EMA and other systems and actors concerned with accounting information and the potential for using those links to promote EMA. It also provides an analysis tool to help in determining actors and systems which are particularly critical to the promotion of EMA and where government efforts might be most effective. 

The group suggested that the report should emphasize that the detailed analysis and conclusions in the report should be used as an example to be adapted by users to their particular situation, rather than as producing universally applicable conclusions. Analysis of effective links for promoting EMA should therefore be country specific, taking into account the different actors and their relationships. This analytical process may also be useful in developing self-assessment exercises for policy managers. 

The group proposed to test this analytical tool in some of the countries represented in the group. This proposal should be evaluated in the next meeting.  

The changes recommended by the group were used in revising the report for publication. 

Report 3: Policy Pathways for Promoting EMA

This draft report was prepared by Ms. Deborah E. Savage and Mr. Paul Lingun of the Tellus Institute, Boston,  and  Mr. Johann Lomsek of the Joanneum Research Institute, Vienna. It was funded by The Austrian Ministry of Transport, Innovation, and Technology, the Joanneum Research Institute of Sustainable Techniques and Systems (JOINTS) and Environment Canada. 

This report includes case studies of policies which are currently in use by governments to promote EMA. The case studies refer to policies which expressly aim to promote EMA or EMA-like systems and not policies which may have an indirect effect on the use of EMA by industry. 

The group noted that most of the examples are policies implemented by national governments. This may have been due to the sources available to the authors. In almost all cases, the government agencies used outside consultants and five cases involved partnerships with accounting organizations. Most policies in these cases are intended to promote use of EMA in the manufacturing sector. Most programmes address both costs and material flows, but focus on costs. Over half of the cases reported promote EMA through external reporting requirements.  Most of the programmes are voluntary in nature or are intended to provide information on EMA. There are no cases involving economic incentives or regulatory relief to promote the use of EMA. 

The group highlighted the need to develop performance evaluation criteria for policy tools. The group decided to address this issue at its next meeting. Some of the criteria could be derived from report 2. 

After the discussion of the draft reports, the group discussed an “ideal” EMA policy design process, including the following elements: 

1) Identify the audience, links and goals;

2) Identify partners, and develop and select tools;

3) Plan, implement, assess and institutionalize processes. 

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