Environmental management accounting

In this lesson

1. 0:00 Environmental management accounting defined
2. 0:58 Risks of poor environmental management
3. 2:05 Applications in business decisions
4. 3:01 Performance management framework for sustainability
5. 4:08 Why environmental cost management matters
6. 5:29 Types of environmental costs explained
7. 7:03 Identifying and allocating environmental costs
8. 8:02 Setting sustainability KPIs effectively
9. 9:24 Real-world KPI examples across sectors
10. 11:00 Telefonica case study walkthrough

About this lesson

activities. You'll explore the key drivers for adopting this approach—from regulatory pressure and stakeholder demands to protecting reputation and gaining competitive advantage—and discover how to categorise environmental costs, establish critical success factors and KPIs, and report on environmental performance using real-world examples. The video breaks down the four main types of environmental costs: conventional costs captured in standard costing systems, contingent costs that may arise in the future, hidden costs buried in overheads, and image and relationship costs that are harder to quantify. You'll learn how to extract these from your accounts and allocate them to the products or processes that create them, enabling better decision-making on budgeting, pricing, investment appraisal, and cost reduction initiatives. A core framework underpins the approach: identify critical success factors for sustainability, develop key performance indicators to measure performance, then measure, compare, and take action in a continuous cycle. The video provides practical examples of sustainability KPIs across multiple dimensions—waste, energy, water, pollution, supply chain, social factors, and governance—and walks through a real Telefónica case study showing how environmental and social KPIs are reported alongside financial metrics. This content is relevant to Performance Management and Strategic Business Leader papers, where environmental accounting increasingly features in case study scenarios.

Duration: 15m