Introduction of ISO standards to Environmental management accounting piloted by Japan

Japan is going to play a leading role in introducing ISO Standards to environmental management accounting through MFCA during this year.

The introduction of Material Flow Cost Accounting (MFCA) standardization to ISO14000 series of environmental management standards is a project proposed by Japan, which has almost been finalized.

The final working draft of the project was submitted to ISO’s Environmental management committee by the working group which leaded by Kokubu Katsuhiko, Professor, Graduate School of Business Administration, Kobe University. The publication of the standard will be expected within this year after the project being voted by TC207 member countries.

MFCA is an environmental accounting method aimed to identify loss of raw material and energy source by defective products, waste, and other emission during the production process and covert them into monetary value. MFCA seeks to reduce costs through waste reduction, thereby improving business productivity. If well applied, MFCA can help reduce both environmental impact and costs at the same time, as a tool of decision making by business executives and on-site managers.

There are over 300 companies in the field of Sekisui chemical industry has adopted MFCA in Japan. According to Professor Kokubu, it is easier to promote the adoption of MFCA in oversea sites or their oversea affiliates via ISO standards, thus raising competitiveness of Japan’s companies.