Environmental management accounting to support economic and environment improvement in a made-to-order production

Environmental Management Accounting (EMA) is a methodology to help organisations identify and quantify the environmental costs of their production processes and analyse the economic benefits that result from improving their environmental performance. To do this, EMA uses appropriate accounting systems that translate the environmental impacts of industrial activity into monetary terms. The international scientific community unanimously agrees that EMA is a powerful tool to improve the environmental and economic performances of organisations, and the literature review verifies that EMA is a valid tool that improves decision making and budgeting, which results in comprehensive information and direction about the significant economic costs that are due to the environmental aspects/impacts of the organisation. However, to date, studies have only applied EMA to companies that mass produce. EMA has not been validated for companies where production is made to order. This study investigated the applicability and validity of using the EMA methodology for companies where production is made to order. To this end, we present the research conducted in 2009 by the Environmental Quality Research Centre at the University of Padua in collaboration with an Italian manufacturing company that allowed the EMA methodology, with the necessary assumptions and amendments, to be applied to its made-to-order production. From the case study, this article highlights the potential use and limitations of applying EMA in a made-to-order production company, confirming that EMA is able to identify and quantify the environmental cost and support management in decision making regarding environmental and economic performance improvements. This article also distinguishes the similarities and differences between the chosen case study and other case studies from literature that have studied companies that mass produce, i.e., comparing the methodology followed, results, validity and limitations of the results. © 2012 by Nova Science Publishers, Inc. All rights reserved.