Today, environmental managers are learning new ways of adding value to their organizations. Before, the environmental department was an overhead expense—an indirect support group required for complying with burdensome regulations. Now, such departments add insights and value during strategic planning sessions, identify efficiency improvement opportunities, provide a superior return on investment, and—bottom line—improve profits. The primary approach to meeting the challenge is a new environmental management system (EMS) that identifies, measures, and manages a diverse set of internal and external customer needs. These needs include environmental cleanups, regulatory compliance, pollution prevention, and design for the environment—and each represents a potential improvement opportunity. Unfortunately, most organizations have so many such needs that all cannot be addressed at once, given the resource constraints of a competitive business climate. Thus, priority is a key concept of an effective EMS. This article describes an innovative application of consensus‐building tools that quickly identify and set priorities for diverse environmental programs. The article also shows how appropriate performance measures will align these programs with corporate goals and objectives.

Recent years have seen the environment emerge as one of the most pressing issues facing American business. Eventually, environmental costs will affect the bottom line of every American company. A recent study in the National Law Journal estimates that cleanup of the nation's known hazardous wastes sites will cost $752 billion over thirty years under current environmental policies. Environmental legislation and regulations impose annual compliance costs estimated by the Environmental Protection Agency at more than $30 billion. In the near future, environmental expenses for cleanup, regulatory compliance, and management are anticipated to grow to between 2.5 and 3 percent of GNP. Corporations that wish to be competitive must successfully manage these costs while maintaining or improving their role as responsible corporate citizens. Implementing a comprehensive system for identifying and managing environmental costs requires a multidisciplinary team effort. Environmental costs impact product selection, design and pricing, capital budgeting, and future strategic direction. In order to make informed and meaningful managerial decisions on environmental programs, real cost data are vital. An environmental management systems (EMS) requires information to set goals and then monitor progress towards those goals over time. This article will discuss the current cost accounting systems (CASs) available to support the myriad goals of environmental management systems. In addition, the article will outline a framework for plotting the location of your current EMS on a matrix of regulatory and information requirements and evaluating whether your corporation's CAS is adequate to support the goals and objectives set by your environmental management program. By anticipating future regulatory and information requirements, flexible systems can be developed to adapt to new and more stringent regulations and more complex information requirements.

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