Introduction

Businesses are finding it crucial to put specific safeguards in place to preserve the environment from their daily operations as a result of the public’s growing awareness of environmental issues. They now understand that taking action that enables them to safeguard the environment as effectively as possible is crucial to their survival in this cutthroat age. The management accounting system of Visy, the biggest privately held paper, recycling, and packaging company in the world, is examined in this study in order to assist the company in achieving its environmental objective. The National Packaging Covenant and Environmental Report for the fiscal year 2004 will be thoroughly reviewed in order to evaluate the main actions done by the company to meet its environmental objective.

Visy’s Environmental Goal

Visy has been very committed to its environmental objective of becoming a more ecologically friendly packaging manufacturer and consumer in Australia. Visy has combined its packaging environmental code of practice with its management systems to become an environmentally sustainable packaging producer. Additionally, it has consistently worked to reduce, recycle, and reuse more used packaging while avoiding disposal. Therefore, Visy’s primary objective with regard to the environment is to adhere to the rules in order to prevent adverse effects on the environment, which may be accomplished by making a commitment to enhancing the sustainability of the packaging and recycling sectors.

The corporation has implemented a number of measures to accomplish its objective, including increased recovery rates, light weighting, and improved market development and design (Environmental Management System (EMS) 2010). Management accounting’s contribution to achieving the environmental goal In order to help the organization achieve its environmental goal as efficiently as possible, accountants play a significant role. Meeting the informational requirements of the organization’s internal management is essentially the focus of management accounting.

Such management focuses on both financial and non-financial data, which essentially aids in addressing tasks like creating business strategies and making the best use of the accessible resources. Due to their access to the organization’s financial and non-financial data, accounting and accountants play a significant role in guaranteeing the effective administration of environmental management systems. They are also capable of using the facts at their disposal to make the best decisions. Accounting in general plays a significant role in businesses by establishing guidelines for financial management that all organizations must go by. Similarly, by integrating the traditional accounting functions into the daily environmental management process, the accountant and accounting can assist in the implementation of an Environmental Management System (EMS) within the company.

Better management of environmental issues would arise from an efficient implementation of EMS since it incorporates an accounting mechanism that primarily deals with environmental performance evaluation, valuing the impact of the organization’s environmental activities, and tracking the success of environmental-related actions (Wilmshurst and Frost 2001).

Role of Management accounting in attaining the Environmental Goal

To help the organization achieve its environmental goal as efficiently as possible, accountants play a significant role. The primary goal of management accounting is to meet the informational requirements of the organization’s internal management. Such management focuses on both financial and non-financial data, which essentially aids in addressing tasks like creating business strategies and making the most use of the resources at hand.

Since they have access to the organization’s financial and non-financial data, accounting and accountants play a crucial role in guaranteeing the effective administration of environmental management systems. They are also capable of using the facts at their disposal to make the best decisions. Accounting in general plays a significant role in businesses by establishing guidelines for financial management that all organizations must go by. Accounting and accountants are essential to ensuring the efficient operation of environmental management systems since they have access to the organization’s financial and non-financial data. They are also able to make the best choices possible by using the information at their disposal. Businesses benefit greatly from accounting in general because it sets standards for financial management that all companies must follow.

Previous research has also demonstrated that accountants and accounting play a significant part in the effective management of the environmental system inside the company. Accounting professionals may assist an organization in determining environmental information so that they can make critical decisions, claim Wilmshurst and Frost (2001). According to a different study on sustainability, accountability, and corporate governance by Ans Kolk (2006), businesses are continuously working to increase transparency and accountability by providing the public with crucial information about their ethical, legal, and environmental aspects. According to the study, there is a direct correlation between corporate governance and sustainability, which encompasses environmental factors (Kolk 2006).

Assistance of Management Accounting in attaining Environmental goals at Visy

Good business practices and positive environmental outcomes are closely related, according to Visy’s top management. As a result, the management has been very worried about the environmental effects of the company’s packaging operations. With an emphasis on the monetary data related to earnings, expenses, and savings as well as the physical flow of information such water, energy, materials, and trash, management accounting primarily addresses the internal administration of the company. The management of Visy has communicated a set of ideals to its employees to help them make decisions about their daily work that will keep them ecologically efficient.

 In order to adhere to the guidelines and protocols outlined in the Environmental Code of Practice for Packaging, Visy’s management is also thinking about incorporating the code into its management system. Given that energy and water are seen as important resource management issues in Australia, Visy’s management accounting system is set up to give greater priority to these capital allocations in order to make internal operations more environmentally friendly. Furthermore, in order to attain environmental efficiency, Visy also does energy audits in order to build water management strategies that lead to recycling and water optimization at Visy locations. Since energy and water are regarded as the most limited resources, Visy’s management accounting is particularly effective because each division has goals for their use. In order to maintain the organization’s environmental competitiveness and enable it to accomplish its environmental objective, Visy’s overall management accounting strives to increase internal efficiency (The Visy Report 2010).

Conclusion

The main focus of this study is to evaluate how well Visy’s management accounting meets its environmental objective. An organization’s environmental effectiveness is greatly influenced by its accountant and accounting. By assessing the management accounting system at Visy, it can be concluded that it is quite effective in enabling the organization to achieve its goal of environmentally effective in packaging and recycling.

References

  • Environmental Management System (EMS), 2010 [Online]. Available at: http://www.visy.com.au/index.php?id=109 [Accessed: 18 September 2010].
  • Kolk, A. 2006. Sustainability, Accountability and Corporate Governance: Exploring Multinationals’ Reporting Practices. Business Strategy and the Environment, Vol 17, pp. 1-15.
  • The Visy Report, 2010 [Online]. Available at: http://www.visy.com.au/index.php?id=106 [Accessed: 18 September 2010].
  • Wilmshurst, T. D. and Frost, G. R. 2001. The role of Accounting and the Accountant in the Environmental Management System. Bus. Strat. Env., Vol 10, pp. 135–147.