Institute's clean sweep

Finance: Management accountants believe their hour has come. They are now forging ahead on green issues. By Roger Trapp

Newly qualified management accountants find themselves in a profession that seems to be growing in confidence almost by the minute. Not only is it buoyed by the increasing recognition that the training it provides is often of greater relevance than that of the supposedly superior chartered accountants, it is also seeking new battle grounds.

Central to this approach is the decision by the Chartered Institute of Management Accountants to join forces with several energy management bodies to provide an information pack aimed at helping companies to meet environmental standards, save resources and reduce waste and pollution.

To be fair, the Association of Chartered Certified Accountants has been active in this field for some time - promoting better practice through its environmental reporting awards. But - in view of where its membership lies - it is arguable that Cima is in a better position to push the ideas forward. A Cima spokeswoman pointed out that the environment was no longer just the concern of special-interest groups and that accountants had an important role to play in reporting on it. And of those accountants, the best placed are arguably those caught up in the hurly-burly of business rather than those who come along later seeking to make sense of what has gone before.

Cima acknowledges this by saying that environmental management is not just about reporting the environmental consequences of a business's activities, though accuracy in this regard can be valuable. Rather, it is about gearing business towards making the "right" kinds of decisions in this area.

Recent years have seen a lot of progress made in moving away from the attitude that concern for the environment could not be compatible with efficient business. Even City analysts now acknowledge environmental criteria when investing in companies in so much as they do not want to be involved with organisations facing large liability claims through pollution.

And a lot of things that fulfil environmental management criteria - such as reducing waste - also make good business sense. As Gillian Lees, project manager for a Cima environmental management guide to be published shortly, says, "Environmental management is all about measuring the true cost, and that is a key skill for management accountants".

That booklet is designed to be a practical document that can be read in just a few minutes. Using case studies of such organisations as The Body Shop and English China Clays to focus on the role of the finance department, it seeks to raise awareness of such subjects as the financial implications of not attending to environmental matters.

The guide points out that management accountants have a role to play in developing and implementing environmental strategy, "given that their goal is to provide information to enable others to manage resources with maximum effectiveness".

It sees them involved in monitoring external developments, identifying and benchmarking against best practice, ensuring that the environmental strategy is fully integrated into the overall business strategy, developing environmental performance measures, setting improvement targets and establishing monitoring procedures; incorporating environmental considerations into capital budgeting decisions, and so on.

The guide follows last month's publication of an information pack on environmental management that contains details of the Government's environmental helpline, a good practice guide and a software-based toolkit for advising on relevant issues.

The institute says that this burst of activity was initiated by members, many of whom were not working in environmentally aware organisations and wanted to learn more about something they realised was becoming increasingly important.

The guide aims to help allay fears on the costs associated with environmental compliance. While accepting that meeting existing and future standards and taking action to present a good environmental image costs money, it points out that lack of environmental management can increase costs -for cleaning polluted sites and legal costs associated with failing to meet standards.

Equally, it points out that the sort of action required is not always complex. The guide points out, for instance, that a haulage group produced a 10 per cent reduction in fuel costs plus reductions in vehicle maintenance and downtime through setting a 56mph speed limit on its trucks. Moreover, the action can create new business, as a result of the growing trend for large companies to carry out environmental audits on suppliers.

There is also some evidence to show that employees respond to appeals to be more environment-conscious in ways that they never would if they were merely exhorted to save costs.

And as Ms Lees stresses, environmental management does not exist in isolation. It is part of a bigger picture that also includes such facets as society, ethics and corporate culture.

Getting involved in it at this comparatively early stage will help the forward-looking young management accountant play a significant role by improving management's awareness and meeting "the increasing and diverse expectations of stakeholders"