-. EPA/-742/F-97/005
                United.Slates ;
                Environmental Protection
                            Office of
                            Prevention, Pesticides,
                            and Toxic Substances
                           _MC. 7409    '   ''
September 1997
Environmental Accounting  Project

Quick  Reference Fact Sheet
Mission: To encourage and motivate businesses to
understand the full spectrum of their environmental
costs, and  integrate  these  costs  into strategic

Background Environmentaland economic benefits
of practicing pollution prevention (P2) can  be
difficult to  measure using traditional methods of
accounting. As a consequence, industrial managers
often may not adopt P2 practices even when it might
be in the best interest of a company to do so.

EPA initiatedthe EnvironmentalAccountingProject
in 1992 to encourage businesses to incorporate
environmental costs into managerial accounting and
capital budgeting practices. An increased focus on
these costs and the closer tracking of these costs to
the  responsible  products' and processes  gives
managers an incentive to identify opportunities for
reducing or eliminating those costs. As a result,
companies  can  achieve improved environmental
performance, gain competitive advantage, and enjoy'.
cost savings and/or enhanced revenues..

The Project operates in cooperation with, and based
on   the  recommendations   ofj  the  business
community, accounting  and other professional
societies, the academic and research community,
government, and  other stakeholder  groups  to
advance  the development  and  application  of
environmental managerial accounting concepts and
methodologies. Major issue areas addressed by the
Project include:
  Concepts and terminology;                  .
  Management incentives;         .       .
.  Education, guidance, and outreach; and     :
  Tools, .methods, and systems^

The Environmental Accounting Project maintains a
Network Directory of some 800 members who are
actively participating or are interested in the issue.
                                   Examples of Accomplishments to Date:
                                    Developed an environmental accounting primer
                                     that covers the basic terms and concepts and
                                     discusses application options       - .
                                    Published  case  studies   on  environmental
                                     accounting  initiatives at AT&T and at Ontario
                                     Hydro (a Canadian utility)       
                                    Published an analysis'of  how environmental
                                     accounting applies jto the electroplating industry
                                    Documented available techniques for '
                                     estimating potential environmental liabilities*
                                    Published best  practices report of chemical and.
                                     oil companies' environmental accounting efforts
                                    Facilitated environmental accounting training for
                                     : small business technical assistance providers
                                    Hosted workshops for industry and government
                                     creating dialogue oh environmental accounting
                                    Supported the development of a software tool to
                                     help companies incorporate environmental costs
                                     into their capital budgeting decisions
                                    Published resource guide on tools and software
                                     that account for environmental costs
                                    Completed  a status report the on the  extent to
                                     which the nation's manufacturing firms consider
                                     environmental costs in investment decisions

                                   Projects underway include:       .  
                                     Case  studies  on life  cycle  accounting  for
                                     materials management
                                     Series of short case studies demonstrating the
                                     application   and  benefits  of  environmental1
                                     accounting across a range of business decisions
                                     Research on corporate decision-making behavior
                                     with respect to pollution prevention investments
                                    Research on health and safety costing issues

                                   For further information: See the Project's website
                                   atwww.epa.gov/bpptintr/acctg, or contact EPA's
                                   Pollution Prevention Information Clearinghouse
                                   at 202/260-1023, fax 202/260-4659, or