This research explores how Environmental Management Accounting (EMA) enhances accountability in circular eco-innovation projects, revealing gaps in long-term sustainability reporting and emphasizing the need for improved transparency and standardized disclosure practices.
The world is shifting toward a circular economy 🌱—an innovative approach where waste is minimized, resources are reused, and sustainability becomes the foundation of economic growth. But how do businesses measure and report the success of their eco-friendly projects?
A recent study explores Environmental Management Accounting (EMA) and its role in ensuring accountability for circular eco-innovation projects. It dives deep into how companies measure the effectiveness of sustainability investments and whether they maintain transparency over time. Let’s break down the key findings and their impact on the future of green business!
Before diving into the numbers, let’s define circular eco-innovation. Unlike traditional innovation, which often leads to increased resource consumption, circular eco-innovation aims to:
✅ Reduce waste ♻️
✅ Optimize resource usage 🔄
✅ Lower environmental impact 🌎
✅ Improve sustainability reporting 📊
It’s about designing products, processes, and systems that close material loops—meaning resources are continuously reused rather than wasted.
Investing in sustainability is one thing, but measuring its success is another. Many companies adopt eco-innovation projects, but without proper accounting practices, it’s challenging to track their impact.
EMA provides companies with tools to:
📌 Identify cost savings from sustainable practices 💰
📌 Measure the environmental benefits of projects 🌱
📌 Improve transparency and accountability 🏛️
📌 Align sustainability goals with business performance 📊
The study analyzed five circular eco-innovation projects in Spain and assessed how well companies documented their sustainability progress over time.
The study reviewed five Spanish manufacturing companies that invested in eco-innovation projects. Here’s what they focused on:
🔹 Appliance Industry: Redesigned components to use fewer materials and reduce waste.
🔹 Automotive Industry: Optimized painting processes to lower solvent and energy consumption.
🔹 Elevator Industry: Applied life cycle analysis to develop more energy-efficient elevators.
🔹 Plastics Industry: Created products designed for complete recyclability.
🔹 Paper Industry: Built a plant to convert production waste into energy.
The results were impressive:
✅ Energy savings of up to 40% ⚡
✅ Waste reduction by as much as 90% 🚯
✅ Material savings with lower raw material usage 📉
✅ CO2 emission reductions of over 500,000 tons per year 🌍
These projects show that circular eco-innovation isn’t just good for the planet—it’s great for business!
One surprising discovery? While companies reported their sustainability achievements early on, transparency declined over time. Many businesses did not maintain detailed records of their projects’ long-term impact.
❌ Some companies stopped reporting sustainability data after a few years.
❌ Others provided only basic information without in-depth analysis.
❌ A few failed to mention their past eco-innovation projects altogether.
This accountability gap means stakeholders and policymakers lack access to long-term environmental data. Without proper documentation, it’s harder to measure whether sustainability efforts truly succeed.
So, where do we go from here? The study suggests several ways to improve circular innovation reporting:
📌 Encourage long-term sustainability disclosure—not just one-time reports.
📌 Integrate environmental accounting into decision-making at all levels.
📌 Use clear and standardized reporting frameworks for tracking impact.
📌 Train accountants and managers on linking finances to sustainability.
To drive accountability, governments and regulatory bodies should enforce stricter sustainability reporting rules. Transparency is key to ensuring companies follow through on their green commitments!
Circular eco-innovation is a game-changer for sustainability, but without effective accounting and transparency, its impact is difficult to measure. Companies that track and disclose their sustainability efforts consistently will gain a competitive edge—not just in compliance, but in customer trust and market value. 📈
✅ Want to future-proof your business? Start integrating Environmental Management Accounting (EMA) today!
🌎 Let’s innovate responsibly and build a greener tomorrow! 🌿♻️
🔄 Circular Economy – A sustainable system where products, materials, and resources are reused, repaired, and recycled instead of being wasted. - This concept has also been explored in the article "Unlocking the Power of Lignin: Biocatalysis for a Sustainable Circular Economy 🌱 🧬".
🌱 Eco-Innovation – The development of new technologies or processes that reduce environmental impact while improving efficiency and sustainability.
📊 Environmental Management Accounting (EMA) – A method for tracking and analyzing a company's environmental costs, helping businesses measure the financial and ecological benefits of sustainability efforts.
♻️ Resource-Based View (RBV) Theory – A business strategy that emphasizes using a company’s internal resources (like technology and expertise) to gain a competitive advantage in sustainability.
🏛️ Stakeholder Theory – A framework that highlights the importance of businesses considering the interests of all stakeholders (customers, investors, policymakers) when making sustainability decisions.
🌍 Carbon Accounting – A way to measure the amount of CO₂ emissions a company produces and track efforts to reduce its carbon footprint. - This concept has also been explored in the article "Net Zero 💚 Carbon Neutrality 🌍 Understanding the Green Goals".
Source: Portillo-Tarragona, P.; Kuba-Khoury, V.; Aranda-Usón, A.; Scarpellini, S. Environmental Management Accounting and Accountability for Circular Eco-Innovation Projects. Sustainability 2025, 17, 2392. https://doi.org/10.3390/su17062392
From: University of Zaragoza.
