Question 1

Under ISO14031, which of the following is an environmental condition indicator?

Accepted Answer

An environmental condition indicator is a measure of the state or quality of the environment, and air quality surrounding a company's factories is a direct measure of the impact of the company's operations on the environment. The other options are either measures of inputs (A and C) or measures of management practices (D), which may indirectly affect the environment but do not directly measure its condition.

Question 2

Under ISO14031, which of the following is a management performance indicator?

Accepted Answer

The dollar amount spent on developing staff environmental awareness training programs is a management performance indicator under ISO14031, as it measures the company's commitment to improving its management processes and staff education. The other options are either environmental performance indicators (A and B) or supplier performance indicators (D), which are not specifically related to management performance.

Question 3

A small to medium-sized organisation wanting to manage their environmental performance with a focus on improving their environmental management systems would be most likely to use:

Accepted Answer

ISO 14005 provides guidelines for a phased approach to establishing, implementing, maintaining, and improving an environmental management system, making it suitable for small to medium-sized organizations looking to improve their environmental management systems.

Question 4

The international standard of environmental performance indicators include:

Accepted Answer

The international standard of environmental performance indicators includes operational performance, management performance and environmental condition indicators. Employee performance and community satisfaction indicators may be important to assess overall sustainability, but they are not specifically included in the standard for environmental performance indicators. Supplier rating indicators, while important for assessing supply chain sustainability, are also not included in this particular standard.

Question 5

How do environmental issues relate to the strategic decisions of the firm?

Accepted Answer

The answer of How do environmental issues relate to the...

Question 6

The results of a survey of Australian companies listed on the ASX and the National Greenhouse Energy Reporting Register revealed that a reason for omitting sustainability costs in capital investment decision making was a belief that:

Accepted Answer

Sustainability costs being seen as a corporate-wide issue suggests they are not considered specific to individual projects, leading to their omission in project-specific capital investment decisions.

Question 7

Why is the inclusion of 'environmental performance' likely to become more common in a firm's balanced scorecard?

Accepted Answer

As environmental sustainability becomes increasingly important to businesses and society, it is likely that it will be one of a firm's strategic priorities, and therefore, it would make sense for it to be included in the balanced scorecard.

Question 8

An organisation wanting to manage their environmental performance with a focus on Life Cycle Assessment would be most likely to use:

Accepted Answer

ISO 14040 is a standard that provides guidelines for a Life Cycle Assessment (LCA) of products and services. It is the most appropriate standard for an organisation seeking to manage their environmental performance with a focus on LCA. ISO 14005 provides guidelines for an Environmental Management System (EMS) for small and medium-sized enterprises, ISO 14031 provides guidelines for environmental performance evaluation, and ISO 14064 provides guidelines for the quantification and reporting of greenhouse gas emissions and reductions. While these standards may be useful for managing environmental performance, they are not specifically focused on LCA.

Question 9

Which of the following environmental issues needs to be accounted for in decision making?

Accepted Answer

Both options A and B are true and address important aspects of environmental issues in decision making. It is crucial to consider the environmental costs that differ between alternatives, as failure to do so can lead to flawed decision making. Additionally, a project may have financial benefits but negative environmental impacts, which highlights the need to consider environmental factors in decision making. Therefore, the best answer is D as it combines both A and B. Option C is also true, but it does not necessarily address the main point of the question.

Question 10

An organisation wanting to manage their environmental performance with a focus on measuring, quantifying and reducing greenhouse gases would be most likely to use:

Accepted Answer

ISO 14064 specifically focuses on measuring, quantifying, and reducing greenhouse gases in an organization's environmental performance.

Question 11

The standard GRI framework compares their sustainability performance globally within industry sectors. This is an example of:

Accepted Answer

The act of comparing one's sustainability performance globally within their industry sector is known as benchmarking. Therefore, the best answer is C. Comparability refers to the ability to compare sustainability performance between different organizations or time periods. Offsetting refers to the process of compensating for one's environmental impact by investing in projects that reduce greenhouse gas emissions or promote sustainability elsewhere. Analyzing refers to the examination and interpretation of data.

Question 12

KPMG reported that globally 78% of companies worldwide refer to GRI guidelines in their corporate responsibility reports. According to the GRI (G4) guidelines, the product and services aspect would be categorised as:

Accepted Answer

The answer of KPMG reported that globally 78% of companies...

Question 13

When an organisation relates the product value measured in dollars against the resources used this measurement is known as a(n):

Accepted Answer

The given measurement, which compares product value in dollars to the resources used, is known as eco-efficiency. It assesses how efficiently an organization is using its resources to generate economic value.

Question 14

Which of the following is a performance indicator for social performance?

Accepted Answer

Percentage of suppliers who have undergone screening on human rights policies is a performance indicator for social performance as it shows the company's commitment to ethical and responsible practices in its supply chain. The other options listed are more likely indicators of environmental or financial performance.

Question 15

Management requiring guidance on how to identify environmental performance measures would research:

Accepted Answer

ISO14031 provides guidance on how organizations can evaluate their environmental performance using environmental performance indicators (EPIs), making it the relevant choice for management seeking guidance on identifying environmental performance measures.

Question 16

Because environmental issues span the extended value chain of the firm, environmental management accounting uses supply chain management by:

Accepted Answer

Environmental issues span the entire value chain and therefore environmental management accounting uses supply chain management by identifying and using environmentally sensitive suppliers as well as assisting customers with environmentally sensitive disposal of the firm's goods. This helps to ensure that the environmental impact of the firm's activities is minimized throughout the value chain. In addition, considering cost savings by using customer profitability analysis is not directly related to environmental management accounting.

Question 17

Which of the following statements about traditional management accounting systems is true?

Accepted Answer

Traditional management accounting systems typically focus on financial performance measures and often do not take into account environmental costs. However, where environmental costs do exist, it is common to find some reporting of these costs at the lower levels (tiers 1 and 2) where the costs are most directly incurred. At the higher levels (tiers 3, 4, and 5), there is generally very little reporting of environmental costs, as these costs are often indirect and can be difficult to allocate to specific products or activities. Therefore, option D is the correct answer.

Question 18

Under ISO14031, which of the following is an operational performance indicator?

Accepted Answer

The percentage of raw materials from recycled sources is an indicator of the operational performance in relation to resource efficiency and waste reduction. Option B is an environmental impact indicator, option C is a management system indicator, and option D is an ethical indicator.

Question 19

Which of the following is not a good reason for adding a sustainability perspective on the BSC?

Accepted Answer

If sustainability impacts can be captured by the existing four perspectives of the balanced scorecard, there may not be a need to add a separate sustainability perspective. However, if sustainability is considered part of the company's core strategy, likely to impact on the company's reputation, and resources allocated to sustainability issues by top management are large, those are all good reasons to add a sustainability perspective to the BSC.

Question 20

Which of the following statements is correct?

Accepted Answer

Eco-intensity measures the relationship of input to output, specifically the environmental inputs (such as energy or materials) needed to produce a certain level of output (such as goods or services). Eco-efficient measures are also related to this concept, but focus on achieving the same level of output with fewer environmental inputs, making it a measure of productivity.

Quiz 17: Sustainability and Management Accounting