22 VADYBA / MANAGEMENT. 2006 m. Nr.

3–4 (12–13)

ENVIRONMENTAL ACCOUNTING - AN IMPORTANT PART OF AN

INFORMATION SYSTEM IN THE CONDITIONS WHEN THE COMPANY
APPROACH TO THE ENVIRONMENT INFLUENCES ITS PROSPERITY

Jaroslava HYRŠLOVÁ, Miroslav HÁJEK

The company approach to the environment may be unambiguously regarded as a factor which, in the present conditions,
influences prosperity of the company. The aim of the paper is to define the system of environmental accounting as an important source
of information supporting decision-making processes in these conditions. Attention is paid to information needs of the individual users
of the system of environmental accounting, resulting in further structuring of the system. In the conclusion, factors which significantly
influence the system of environmental accounting are specified.
Key words: sustainable development, economic-environmental efficiency, environmental accounting, environmental
information

Introduction
From the long-time perspective, business where transformation processes are not accompanied by
processes of adding value, i.e. where these processes do not bring certain economic effect to the entrepreneur,
is not sustainable. Similarly, business without knowing and respecting needs of the customers is not
sustainable. Although business is, unambiguously, connected with economic factors, it is not possible to
prefer solely economic aspects in the business. Also other aspects must be taken into consideration within the
framework of strategic management, as well as in everyday activities and on all levels of management [1].
According to J. Veber, these aspects are as follows:
− qualitative aspects (relating both to the quality of the output of the business activity and
accompanying services itself, as well as to the quality of all company processes);
− time aspects (relating to meeting the set terms and seeking to reduce the time in practically all
business activities); as well as
− other aspects, which are usually regulated by laws and regulations, or are considered by the
company voluntarily (i.e. exceed the scope of the regulations), for example environmental
aspects, aspects of public health and safety etc.
The task of the company management is to aim at finding the factors that will result in success,
perfection, and prosperity of the company. In the present situation, protection of the environment represents a
highly relevant topic. This is true, especially, for the following reasons:
− Negative environmental impacts are connected with the activity of each entity - the company
activities, products and services cause changes of the environment.
− In connection with the company activities, natural resources are consumed, and waste flows are
released into the environment. At the same time, higher and higher accent is put on sustainable use
of resources, waste management, and enforcing the „polluter-must-pay“ principle, within the
framework of international activities, as well as within the framework of state environmental
policy.
− In the latest years, attention to the environmental behaviour of the company is paid by many
interested parties (not only by state institutions, but also by the public and business partners).
It means that adverse impacts of the company activities, products and services on the environment may
significantly endanger its existence, prosperity, and may even result in its liquidation. Attention paid to
technical, safety and environmental requirements is „rewarding“ for the company. Sound approach to the
environment may represent a significant competitive advantage (for example, Veber et al. [1]).
Integrated management is considered to be an important tool of the company on its way to prosperity
(for example, Veber et al. [1]). According to J. Veber, basic recommendations concerning prosperity of
companies may be seen in two main factors:
− It is necessary to ensure proper operating practice of the company, in order to ensure parity of its
operating basis with similar (comparative, competitive) entities. This should be done in all basic
fields (i.e., in economic parameters, quality, as well as time availability in relation to supplied
products or services).
 VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13) 23

− It is necessary to find out and utilise the factors which represent a competitive advantage for the
company.
In a number of companies, it is purposeful to address also environmental aspects in both these factors.
Within the framework of the first item, it is necessary to set the operating basis in the way that the
operation will be sufficiently economical, and, therefore, it will be possible to adapt to the price level of
comparable products, and, at the same time, to guarantee the requested quality, as well as comparable time
dimension concerning flexibility, response to requirements of the customers etc. This is a permanent process.
Companies concentrate its efforts on cost reduction, and on increase of performance of the company. In a
number of sectors, costs spent in connection with environmental protection or as a consequence of
damaging the environment count among significant elements of cost. A highly important method of cost
reduction and increase of efficiency of company processes is management of material and energy flows, as
well as waste flows of all physical states. Attention should be paid also to the utilization of materials and
energy. Operating changes often cause significant investments into new technologies. In connection with
investment projects, it is always sensible to consider impacts of the projects on the environment1.
Within the framework of the second item, it is necessary to find out and utilise the factors which
represent a competitive advantage for the company. Therefore, strategic management activities must exist in
the company, pro-innovation climate must be set, and principle of continual improvement must be an integral
part of the company management. In view of growing importance of the environmental protection, also the
company approach to the environment may become a source of a competitive advantage in the latest years. It
means that issues of the environmental protection are becoming an integral part of the company strategy and
management on the tactical and operational levels - companies implement so-called environmental
management systems. Many companies invest considerable means into research and development activities
whose priority aim is environmental protection (for example, development of environmentally sound
processes and products).
On the basis of the information stated above, the company approach to the environment may be
unambiguously regarded as a factor which, in the present conditions, influences prosperity of the
company. The aim of the paper is to define the system of environmental accounting as an important source of
information supporting decision-making processes in these conditions. Attention is paid to information needs
of the individual users of the system of environmental accounting, resulting in further structuring of the
system. In the conclusion, factors which significantly influence the system of environmental accounting are
specified. The paper is based on available sources of scientific literature, and analyses the individual
approaches to the system.

1. Conception of eco-efficiency on the level of the company

Incorporation of the sustainable development principle into the company practice may significantly
promote the improvement in the field of economic-environmental efficiency (eco-efficiency). The concept of
eco-efficiency was, for the first time, discussed in scientific literature in the beginning of 1990s [2].
Awareness of this concept spread thanks to the organisation Business Council for Sustainable Development
(BCSD)2, and a scientific publication presented on the summit in Rio in 1992 [3; 4]. Eco-efficiency may be
analysed on global, regional, as well as company levels.
The basic idea of eco-efficiency was defined by BCSD [3]:
Eco-efficiency may be achieved by supplying such products, goods and services which will be
competitive, satisfy human needs and increase quality of life, with gradual reduce (mitigation) of
environmental impacts and with consumption of resources within the framework of the whole life cycle
which will be at least on the level of the estimated carrying capacity of the Earth.
Organisation for Economic Co-operation and Development (OECD) states that eco-efficiency reflects
the efficiency of utilisation of natural resources to filling human needs. It may be defined as a relation
between outputs and inputs: the outputs represent the value of products or services produced by the company,

1
In the Czech Republic, Act No. 244/1992 Coll. on environmental impact assessment (in the wording of subsequent legal regulations) regulates
assessment of impacts of projected buildings (or, optionally, their changes and changes in their use), activities, technologies, development policies and
programmes, and products on the environment, and defines state administration bodies competent to assess these impacts.
On January 1, 2003, Act No. 76/2002 Coll. on integrated pollution prevention and control, on integrated pollution register, and on change of certain
acts, entered into force in the Czech Republic. Within the framework of this Act, there is defined scope of facilities in the case of which their operators
must obtain an integrated permit for their operation. These are facilities from the sectors of energy production, metallurgy, use of mineral resources,
chemical productions, waste treatment, pig and chicken factory farms, food industry and other industries.
2
Since 1995, the name of this organisation is World Business Council for Sustainable Development (WBCSD).
24 VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13)

sector, or the whole industry; the inputs represent the sum of environmental pressures generated by the
company, sector, or the whole industry [5].
From the above-mentioned approaches, it is obvious that eco-efficiency evaluates relations between
outputs of a given process and its inputs. A higher eco-efficiency (of a process, product or company) may be
achieved either by increasing outputs (effects) from the inputs (resources) allocated to realisation, or by
obtaining the requested outputs (effects) with a minimum consumption of inputs (resources). Considering the
fact that the aim of economic behaviour is to manage „scarcity“ (problems), so that the process proceeded in
the best possible way, it is necessary to fill information needs of the management so that its efforts could
concentrate on achieving the required results.
If the company aims at significant improvement of eco-efficiency (i.e., at implementation of measures
for environmental protection), then it will be possible to achieve considerable benefits both in the field of
economic performance of the company, and in the field of improving its environmental performance. Slower
improvement of eco-efficiency may bring either improvement of economic situation of the company at the
expense of worsening its environmental performance, or improvement of its environmental performance
achieved at the expense of worsening economic performance.
Company strategy concentrating on significant improvement of eco-efficiency is designated as a win-
win strategy - it means considerable improvement both of economic situation of the company, and of its
environmental performance [6]. At present, the process of integration of environmental aspects into business
approaches is still in progress, and new strategies are developed which can contribute to improvement of eco-
efficiency [7].
The conception of eco-efficiency does not involve the third pillar of sustainable development - the
social field. However, it must be said that concentration on eco-efficiency does not mean refusal of
principles of sustainable development. Improvements in the field of eco-efficiency may significantly
help in implementation of the conception of sustainable development in the business practice. At
present, the efforts, especially of international organisations, concentrate on development of
approaches to measurement of social performance in a quantitative way [8; 9] and on interconnection
of the social field with the conception of eco-efficiency. This will interconnect all three pillars of
sustainable development.

2. Information support of management of eco-efficiency

Two basic groups of information are relevant for measurement and management of eco-efficiency:
− information on financial impacts caused by environmental aspects (it means, in fact, economic
consequences of the impact of the company on the environment); and
− information on environmental aspects and impacts of the company.
If the company intends to develop a quality information system supporting improvement of eco-
efficiency of the company, then it must take the following factors into consideration during collection,
analysis and reporting of data:
− Causes of development of environmental impacts - in this phase, it is necessary to concentrate on
the main problems discussed in connection with damaging the environment; it is necessary to
analyse effects of solid wastes, emissions and waste waters, produced by the company activities, on
the environment, and to identify the aspects and impacts which cause the biggest environmental
problems.
− The individual company activities - the economic performance of the company is influenced by the
company activities, and also environmental impacts are caused by the company activities; it is
necessary to identify the main activities which significantly influence eco-efficiency of the
company. Attention should be paid to production activities, as well as to supporting and service
activities, sale activities, activities connected with obtaining inputs as well as with waste
management, to research and development activities etc.
− Responsibilities - environmental data must be always connected with responsibilities - it means
with responsible staff members who may influence the activities in question. It is always necessary
to define unambiguously competencies and responsibilities.
− Interests of recipients of the information - an information system must always be in accordance
with information needs of its users. It means that collection, recording, analysis, as well as
reporting of information must, in the best possible way, fill the information needs of the most
important interested parties. The company management represents a very important group of users
VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13) 25

of the environmental information. The information system must be able to provide information to
the relevant responsible staff members (managers) in the form enabling them to make decision. The
management must:
− have quick access to necessary information (without time delay);
− have possibility to examine company data in integrated form, as well as in detailed form - it
means on different levels of aggregation (the top management is usually interested in data
concerning the company as a whole, the management on lower levels usually works with
detailed data);
− have possibility to analyse the established data;
− easily detect trends of planned or managed processes; and
− have possibility to continuously communicate and discuss the established facts.
The most important aim of the information system is to optimise the company performance.
Development of an information system fulfilling the above-mentioned requirements is connected with
costs. In order that the environmental information be relevant for the company, the costs spent on
development (or, optionally, adaptations) of the information system must be lower than benefits which the
company obtains from use of this information. It seems suitable to incorporate monitoring of environmental
information into the existing company information system [10; 11; 12]. In the company practice, it is
necessary to make use of the principle of system interconnection during development of information systems,
and to develop comprehensive company information systems which should:
− support intentions, aims, and priorities of the company as a whole;
− provide complete and relevant information on the company, its development, but also on the
surroundings of the company;
− support all significant company processes, both internal (purchasing, production, sale, financial
management, environmental management etc.), and external (links to suppliers, customers, banks,
state bodies etc.);
− have a simple and transparent architecture;
− be integrated from the point of view of data, function, software, hardware, as well as from the
methodical point of view.
It means that the mission of the company information system should be development of a consistent
system, because only such system is a significant precondition for formulation and implementation of
effective strategic intentions. It is necessary to mention still another feature of the company information
system: openness of the system. This is the ability:
− to express reflection of both external and internal environment in the information;
− to receive and store information from external environment;
− to adapt itself to the surrounding environment by using the collected information;
− to reproduce its organism as a system, and, through that, to enable survival of the system in
changing conditions.
If a sound approach to the environment and improvements of economic performance belong
among the aims of the company, then it is obvious that the management, as well as other interested
parties, must have at their disposal information concerning the environmental aspects and impacts of
the company activities, products and services on the environment, as well as their economic
consequences. The above-mentioned information is provided by a system of environmental accounting.
The environmental accounting does not concentrate solely on the field of eco-efficiency. Efficiency is only
one of the aims sought for by the management. It is not possible to neglect another of the aims - effectiveness.
The effectiveness belongs among important criterions of a reasonable course of the business process.

3. Environmental accounting - a system filling information needs of both external and

internal users
In the latest years, various approaches to the conception of environmental accounting were gradually
developed (for example [10; 13; 14; 15; 16; 26]). Environmental accounting is considered to be a system
which provides (collects, records, analyses and reports) information on environmentally induced financial
impacts and on environmental aspects/impacts of a defined economic system (for example, company, plant
etc.) [16]. According to this definition, the environmental accounting concerns:
- environmentally induced financial impacts; and
- environmental aspects and impacts.
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An environmentally induced financial impact means an influence of environmental behaviour of the

company on its economic results and on its financial position. It means that it concerns also impacts on costs
and revenues, assets and liabilities of the company, which are caused by the influence of the company on the
environment. According to this approach, those environmentally induced financial impacts which are
internalised, it means charged to the account (or, optionally, in favour) of the company, are incorporated into
the subject of environmental accounting. However, it should be appreciated that not all impacts of the
company on the environment are internalised. One example of so-called negative externalities is pollution of
the environment. The companies pollute individual components of the environment - air, water and soil - and
these polluted components then cause harm to other economic entities and citizens. The costs which the
company saves on equipment and measures that would prevent formation of pollutants, or, optionally, their
release into the environment, are thus transferred to other entities without consent of these entities, and often
even without their knowledge.
An environmental aspect represents a component of the company activities, products or services
which can have influence on the environment [17].
An environmental impact can be defined also on the basis of ISO 14 001 and the Environmental
Dictionary [17; 18]: An environmental impact is any change in the environment, either favourable or
unfavourable, which is fully or partly caused by the activity, products or services of the organisation.
Developments in the field of environmental accounting were significantly influenced especially by
information needs of the interested parties. The system of environmental accounting was gradually designed
so that it provides environmental information connected with the company and, through that, it fills
information needs of the interested parties.

3. 1 Environmental Information and their Users

Environmental information connected with the company, which is object of attention of the
interested parties, may be divided into two basic groups3:
− environmentally induced impacts on the economic system of the company; and
− environmental aspects of the company activities, products and services, and impacts on the
environment caused by the company.
Environmentally induced impacts on the economic system of the company are expressed in monetary
units (according to the approach of Horngren et al. [19], these are, therefore, financial information). This
concerns all impacts on past, current or future cash flows of the company, on its financial position and on
economic results, which are caused by the influence of the company on the environment. It means that this
concerns environmentally induced financial impacts - a part of this information is, for example, information
on capital costs spent in connection with cleaner production, on fines for violating laws on the protection of
the environment, on environmental liabilities etc. Representation of the value aspect of the business process is
a very important aim of the conventional conception of the accounting system. However, the accounting
system also comprises information expressed in physical units (for example, within the framework of systems
of production planning, in the field of supply, sales, etc.). For evaluation of the environmental behaviour of a
company, it is necessary to have information on environmental aspects and impacts of the company activities,
products and services on the environment. Environmental aspects and impacts on the environment caused by
the company are expressed in physical units (according to the approach of Horngren et al. [19], these are non-
financial information). On the level of a company, these are, therefore, all past, current, as well as future
material and energy flows which influence the ecosystem (the environment). It means that this concerns
information on the amounts of consumed energies and materials, on amounts and types of produced wastes
etc.
There follows from the conception of environmental accounting, defined above, that its main aim is to
fill information needs of interested parties (i.e., external, as well as internal, users).
The conventional accounting system does not provide sufficient information serving to the users in
filling their information needs for evaluating environmental behaviour of the company and its economic
consequences. The conventional accounting system is concentrated mainly on filling information needs of the
interested parties concerning economic performance of the company. Due to growing importance of
environmental information to all interested parties, attention has been paid, in the latest years, to
environmentally induced impacts on the economic system of the company, environmental aspects and

3
The same division of environmental information is used by R. Burritt, T. Hahn and S. Schaltegger [20].
VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13) 27

environmental impacts caused by the company. Therefore, a subsystem has been detached from the
accounting system of the company, which provides information on economic consequences of influence of
the company on the environment. In view of the fact that also information on environmental aspects and
impacts of the company activities, products and services on the environment must be available for assessment
of the environmental performance of the company, a need has developed to produce an information
subsystem identifying, collecting, recording, analysing and reporting environmental information,
designated as environmental accounting.
Various interested parties are interested in environmental information. In the case of certain users, main
attention is paid to economic consequences of influence of the company on the environment; other users are
interested primarily in environmental aspects and impacts. Environmental aspects of the company may
significantly influence economic results of the company (not only concerning costs, but also concerning
revenues) and its financial position. Attention to economic consequences of the company approach to the
environment is paid not only by the company management, but also by other interested parties. Investors and
creditors are primarily interested, on the one hand, in impacts of environmental behaviour of the company on
its financial health, and, on the other hand, in environmental risks and extent of liabilities arising from these
risks. Naturally, also owners are interested in environmental behaviour of the company. Their attention is paid
to economic consequences of environmental behaviour of the company and their impacts on return on
investment. Other interested parties, for example, customers, suppliers, competing companies, state bodies,
the public, mass media, movements and initiatives concerned with environmental protection etc., also pay
attention to the company approach to the environment. Some interested parties (for example, the public,
movements and initiatives concerned with environmental protection) are primarily interested in impacts of the
company activities, products and services on the environment. Therefore, it is obvious that needs in the field
of environmental information are very diverse. The task of environmental accounting is to fill information
needs of all important interested parties.
There is obvious from the previous text that environmental accounting must be designed so that it
provides information enabling to assess environmental behaviour of the company and its economic
consequences - therefore, parts of the system are both information in monetary units (financial information)
and information in physical units (non-financial information). Furthermore, it is necessary to ensure that
different information needs of various interested parties are filled. It means that also the conception of
environmental accounting is based on the basic recognition influencing development of accounting systems in
the 20th century: method of reflecting the business process should be differentiated according to the
users of the accounting information and according to decision-making tasks for support of which the
accounting information is used. Consequently, the conventional accounting system of the company is
divided into three basic subsystems [21]:
− management accounting - its main aim is to reflect the business process from the point of view of
information needs of the management, namely of all staff members on various levels of the
company management - the provided information serves to support management of the business
process;
− financial accounting - its main aim is to fill information needs of external users (primarily, owners,
creditors, business partners, employees, entities participating in financial and capital market),
which, although stay out of the assessed entity, are connected with it and its development by both
future benefits and future risks;
− tax accounting - the aim of this accounting subsystem is to reflect the same business process with
the purpose to correctly determine the income basis, as well as other tax lien and liabilities of the
company.
In the case of the financial and tax accounting, the users press on unification of terms and processes
so that the information submitted in individual cases are comparable. To the contrary, the management
accounting is characterised by the fact that practically no regulation from outside of the company exists. This
accounting subsystem is not uniformly defined even concerning its aim, contents or structure, and even a
unified term is not used for this subsystem [21]. Therefore, the above-mentioned requirements are a criterion
for further structuring of environmental accounting.
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3. 2 Components of Environmental Accounting

Within the framework of environmental accounting (see Figure 1), environmental information - both
financial and non-financial - is collected, recorded, analysed and reported [22; 23; 24; 25]. Economic
consequences of influence of the company on the environment (i.e., financial information) are recorded in the
accounting system of the company. In connection with new information requirements, more detailed
monitoring and analysing of this information takes place when using methods of conventional accounting.
This part of environmental accounting can be regarded as broadening of scope and further elaboration
(specification) within the framework of the conventional accounting system, which reacts on the present
information needs. Another part of environmental accounting is formed by information on environmental
aspects and impacts of the company activities, products and services on the environment expressed in
physical units (non-financial information). This part of the system serves to filling information needs in the
field of the environmental performance of the company. From the point of view of the users, environmental
accounting must fill the needs of internal users, as well as external interested parties.

FINANCIAL NON-FINANCIAL
INFORMATION INFORMATION
(in monetary units) (in physical units)

OTHER
INFORMATION for internal users for internal users

for external users for external users

ENVIRONMENTAL
INFORMATION for internal users for internal users

for external users for external users

Environmental accounting

Information system of the company

Fig. 1. Environmental accounting as a part of information system of the company

When taking into consideration various types of users and their information needs, the system of
environmental accounting can be divided into the following parts:
a) Environmental accounting in monetary units, which is formed by the following subsystems:
− Environmental management accounting (in monetary units) - it concentrates on financial
information for internal users. It represents the main information tool and the basis for the
most part of management decisions. It should provide, for example, responses to the
following questions: What are the costs spent for protection of the environment (so-called
environmental costs), and how should they be identified and monitored? How should the
environmentally induced costs be treated, i.e., whether they should be allocated to the
products, or managed as overhead costs? etc.
− Environmental financial accounting (in monetary units) - it is destined for filling needs of,
primarily, external users in the field of financial information. Object of its attention are
environmentally induced impacts on the financial position of the company and its economic
results.
VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13) 29

− Environmental accounting (in monetary units) satisfying requirements in the field of

information arising from tax laws, or, optionally, other laws, which have relation to the
environment. This concerns specific information, which are, in certain states, requested by
state bodies, banks, insurance companies, etc. For example, in some states, the tax system
takes into account activities for decreasing pollution, deductions from the income basis are
possible in the case of investments for elimination or mitigation of certain selected
environmental problems, accelerated method of depreciation is allowed in the case of cleaner
technologies, etc.
b) Environmental accounting in physical units, which comprises the following subsystems:
− Environmental management accounting (in physical units) - it is destined for filling needs of
internal users in the field of non-financial information. It concentrates on collecting,
recording, analysing and reporting information requisite for decision-making inside the
company.
− External environmental accounting (in physical units) - it concentrates on needs of external
users in the field of non-financial information. It provides (collects, records, analysis and
reports) information for external users, who are interested in environmental aspects and
impacts of the company on the environment (for example, state and local bodies, the public,
mass media, shareholders, various groups and movements concerned with environmental
protection, etc.). It is the main source of information for external environmental reporting. In
fact, by giving reports on impacts on the environment, the company makes a public
inventory of its environmental aspects and impacts (for example, of released pollution, etc.).
− Environmental accounting (in physical units), satisfying requirements in the field of non-
financial information arising from laws and other regulations which have relation to the
environment. The information is destined especially for state bodies (regulators), for
checking observance of set and obligatory limits and standards. In the states where
environmental taxes are collected, these systems are necessary for their exact determination.
In the latest years, specific information on environmental aspects and impacts are requested
also by the present and future creditors, insurance companies, etc.
Environmental accounting must be designed in the way to provides information to important users,
and to help the company to improve its economic performance, as well as its environmental performance, and,
through that, to go ahead on the way to sustainable development.

Conclusions
The development of the systems of environmental accounting was influenced by many factors (see, for
example [13; 16; 26]. As the most important factors, especially the following ones can be considered:
1. Philosophy and tools used within the framework of environmental accounting may significantly
help in the development of the society, designated as sustainable development. The system enables
to assess approach to the environment, and the environmental performance, and facilitates
(mediates) communication in the field of the environmental protection between managers and other
interested parties.
2. Conceptual division of accounting for internal and external users is based on the fact that the need
of information, the level of its details, as well as the level of its confidentiality, are different for
various interested parties (i.e., for various users of the system). It can be proved that concentration
of the system on information needs of the management (i.e., internal users) may bring significant
effects concerning decision-making processes in the company. If the company information system
is designed, primarily, according to information needs of external interested parties, then this can
result in deformations in collection and use of information for decision-making [27; 28].
3. The company management uses various information to support its decision-making processes.
Certain managers rely especially on financial information, others prefer non-financial information.
A number of managers work, within the framework of their decision-making, with both financial
and non-financial information. The need of information relates very closely to the level of
management. For example, the environmental management on the level of the company must fulfil,
especially, the following aims:
- identify possibilities of improvements of the environmental performance of the company;
- set priorities of the individual environmental activities and measures;
30 VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13)

- take into account environmental aspects within the framework of decision-making

concerning the present company outputs (products and services), as well as within the
framework of research and development of new products and services;
- ensure transparency of the company activities relating to the environment;
- identify information needs of important interested parties, obtain the requested information
and enable access of the users to this information (i.e., ensure the process of environmental
communication);
- set the system of environmental management in the company (on lower levels of
organisation), and standards of the environmental protection.
The management needs various types of information in order to fulfil the above-mentioned aims, for
example:
- information on material and energy flows and on inventories, information relating to the
individual company processes and outputs, and information on their environmental aspects
and impacts on the environment;
- information on economic impacts of the company measures for protection of the
environment, as well as information on economic consequences of damaging the
environment;
- qualitative information on requirements (demands) of various interested parties, which ensue
from influence of the company on the environment.
Therefore, the diversity of information needs requires, on the one hand, that needs of both internal and
external users are filled within the framework of the system of environmental accounting (see above),
and, on the other hand, that the system provides information both in monetary units and in physical
units (i.e., both financial and non-financial information) so that this information serves to support
decision-making processes.
4. The significance of environmental accounting resides in interconnecting the economic field with
the field of approach of the company to the environment. Its main interest is to increase awareness
of the management on potential influence of environmental aspects of the company activities,
products and services on economic performance of the company (these influences being either
positive or negative). The environmental performance of the company (usually expressed in
physical units) may, very significantly, influence its economic performance (expressed in financial
indicators). The mutual relations may be depicted (recorded) for example by measuring the eco-
efficiency [29; 30].
5. The fact that the system of environmental accounting works with non-financial information (i.e.,
with information expressed in physical units), is not a privilege of environmental accounting only.
For example, according to C. Horngren and G. Foster, the conventional accounting system provides
both financial and non-financial information, which helps to fulfil the company’s aims [31]. It
means that this conception of the accounting system existed before the development of the system
of environmental accounting, and independently on it. The company management has always
concentrated on improvement of material and energy efficiency with the aim to improve economic
results of the company. For example:
- the efficiency of the production process is deduced from the indicator: input materials for a unit
of the product;
- knowledge of material and energy flows (information is in physical units) is a necessary
precondition for determination of their money expression (in monetary units).
Within the framework of the system of environmental accounting, information comprised in the
conventional accounting is broadly used.
6. Environmental accounting is a very important source of information for the environmental
management of the company also within the framework of environmental management systems. It
provides information which forms a basis for finding places and activities which burden the
environment and cause economic losses to the company, and for proposals of the measures
resulting not only in improvement of the environmental performance of the company, but also in
improvement of its economic results. It is a source of information supporting decision-making, for
example, in the field of a strategy for compliance with rules, regulations and standard in the
environmental field, in the field of designing and projecting products and processes, investment
decision-making, location of equipment, waste management, decision-making concerning products,
VADYBA / MANAGEMENT. 2006 m. Nr. 3–4 (12–13) 31

risk management, evaluation of products, management of purchase activities, cost management,

cost allocation etc.

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