The Role of Environmental Management Accounting (EMA) in Supporting Compliance with Evolving Sustainability Regulations

Abstract

This article examines the role of Environmental Management Accounting (EMA) in supporting compliance with IFRS S1 and IFRS S2, the European Union’s Carbon Border Adjustment Mechanism (CBAM), and the double materiality principle under the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). It employs a literature review and an analysis of relevant regulatory and standard-setting documents to synthesize the information requirements of these frameworks and relate them to key EMA tools. The findings indicate that, despite differences in regulatory objectives, scope, and enforcement mechanisms, all three frameworks require environmental information that is detailed, traceable, verifiable, and connected with financial information at the process, product, and value-chain levels. EMA therefore serves as an organizational information infrastructure that links physical environmental data with monetary and accounting information. Material Flow Cost Accounting and Carbon Accounting provide essential physical and financial data for regulatory reporting, while Environmental Activity-Based Costing and Environmental Life Cycle Costing extend the analysis to activities, long-term costs, and strategic decisions. The article concludes that effective EMA implementation requires clear implementation guidelines, organizational capacity building, cross-functional data integration, and sustained top management support. These conditions can strengthen organizational readiness and enable environmental information to be used not only for regulatory compliance but also for cost management, risk assessment, and strategic decision-making under evolving sustainability regulations.