The environmental management accounting system

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Reference no: EM132161771

Management Accounting and Sustainability

The Senior Management Team of Amcor had plans to improve the effectiveness of management accounting function. Their aim was two-fold. One was to develop a more responsive management accounting team to address pressing needs within the organisation and the other was to improve the management information system as a whole. They identified gaps in management accounting services which needed immediate attention; and therefore appointed Sue Jiang as the Management Accountant. On her first day at Amcor Sue met with Darren Sadler, the team leader of sustainability initiatives, who expressed his concern on how current the management accounting information system did not support the sustainability initiatives undertaken by the Amcor Ltd.

He said:

“We believe in responsible packaging. Being responsible is not just about the sustainability of the packaging; it’s also about packaging’s contribution to sustainability. If packaging does its job well, it provides safe delivery, convenient use and seals in freshness and nourishment. Responsible packaging works to reduce waste by preserving and extending the shelf-life of products; because if packaging fails to protect, product is spoilt, food is wasted, carbonated drinks go flat, medical products are contaminated, and pharmaceuticals lose potency. Amcor’s sustainability experts and life cycle assessment tools assist our customers to understand and make informed decisions about packaging sustainability. Above all else, responsible packaging enhances the products people use in everyday life and contributes to a better world for today and tomorrow. Our packaging innovations demonstrate how responsible packaging contributes to reducing impacts throughout the entire supply chain. These include:

making packaging lighter and optimising packaging size

increasing recycled materials and use raw materials that have a lower carbon footprint;

packaging that maximises the use of transport space and efficiency of distributing goods;

re-closable packaging which protects food until it is used, reducing food waste.

To date, 49% of our manufacturing sites have achieved ISO 14001 accreditation for their environmental management systems. We need your help to design a management accounting information system that will tell us how our sustainability efforts impact on our bottom line and measure progress towards meeting strategic priorities.”

Discussion forum questions

1. Explain to Darren Sadler the benefits of introducing the environmental management accounting system in AMCOR.

2. Describe how the current cost and management accounting system can be adapted to support AMCOR’s sustainability initiatives and measures.

3. Explain how environmental and social cost information may change AMCOR’s management decision making.

4. Stakeholder groups may influence AMCOR to adopt sustainable work practices. Search the AMCOR's website to identify its stakeholders and for each stakeholder group, provide an example of how it can influence AMCOR sustainable reporting practice.

Reference no: EM132161771

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