Green Accounting: Cost Measures
ABSTRACT
In the past, environmental issues were often ignored by both, large companies and small medium enterprises. However, accounting for the environment or the acronym “Green accounting” is receiving increased attention in the recent times. Many companies, particularly small medium enterprises (SMEs) are now interested in being “green”, as many investors place a high value on environmental responsibility. Many environmental costs can be significantly reduced or eliminated as a result of business decisions, ranging from operational and housekeeping changes, to investment in greener process technology to redesign processes or products. Industry and the green movement are tilting towards consensus on the pivotal concept of sustainable development. Better natural resource and green accounts would provide valuable insights into the interaction between the environment and the economy. However, implementing green accounting in organization such as SMEs in Malaysia, results in resistance or ignored due to some reasons such as lack of awareness, lack of ethical education, etc. This paper highlights the issues surrounding the firms green accounting in financial reporting. The key goal of this paper is to outline a set of green accounting measures that are to be addressed in environmental management accounting system of a firm.
In the past, environmental issues were often ignored by both, large companies and small medium enterprises. However, accounting for the environment or the acronym “Green accounting” is receiving increased attention in the recent times. Many companies, particularly small medium enterprises (SMEs) are now interested in being “green”, as many investors place a high value on environmental responsibility. Many environmental costs can be significantly reduced or eliminated as a result of business decisions, ranging from operational and housekeeping changes, to investment in greener process technology to redesign processes or products. Industry and the green movement are tilting towards consensus on the pivotal concept of sustainable development. Better natural resource and green accounts would provide valuable insights into the interaction between the environment and the economy. However, implementing green accounting in organization such as SMEs in Malaysia, results in resistance or ignored due to some reasons such as lack of awareness, lack of ethical education, etc. This paper highlights the issues surrounding the firms green accounting in financial reporting. The key goal of this paper is to outline a set of green accounting measures that are to be addressed in environmental management accounting system of a firm.
Cite this paper
K. Moorthy and P. Yacob, "Green Accounting: Cost Measures," Open Journal of Accounting, Vol. 2 No. 1, 2013, pp. 4-7. doi: 10.4236/ojacct.2013.21002.
K. Moorthy and P. Yacob, "Green Accounting: Cost Measures," Open Journal of Accounting, Vol. 2 No. 1, 2013, pp. 4-7. doi: 10.4236/ojacct.2013.21002.
References
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http://www.kpmg.com/Global/en/IssuesAndIsights/ArticlesPublications/Press-releases/Pages/Kyoto Protocol http://unfccc.int/kyoto_protocol/items/2830.php [6] K. H. Olsen, “The Clean Development Mechanism’s Contribution to Sustainable Development: A Review of the Literature,” Climate Change, Vol. 84, No. 1, 2007, pp. 59-73. Hdoi:10.1007/s10584-007-9267-y [7] L. Shelton, “Techniques and Procedure in International Environmental Law. ‘Environmental Audit,” The United Nations Institute of Training and Research Palais des Nations, Geneva, 2004. [8] K. Schultz and P. Williamson, “Gaining Competitive Advantage in a Carbon-Constrained World: Strategies for European Business,” European Management Journal, Vol. 23, No. 4, 2005, pp. 383-391. [9] H. Y. M. Abdel-Rahim and Y. M. Abdel-Rahim. “Green Accounting—A Proposition for EA/ER Conceptual Implementation Methodology,” Journal of Sustainability and Green Business, Vol. 5, No. 1, 2010, pp. 27-33. [10] V. P. Dorweiler and M. Yakhou, “Environmental Accounting: An Essential Component of Business Strategy,” Asian Institute of Technology Thailand Online, Vol. 13, No. 2, 2004, pp. 65-77. [11] J. Ouellette, “Coagulants and Flocculants Rise,” Chemical Marketing Reporter, Vol. 250, No. 15, 1996. [12] J. Lintott, “The Environmental Accounting: Useful to Whom and for What?” Ecological Economics, Vol. 16, No. 3, 1999, pp. 179-190. [13] F. O. Zadeh and A. Eskandari, “Firm Size as Company’s Characteristic and Level of Risk Disclosure: Review on Theories and Literatures,” International Journal of Business and Social Science, Vol. 3 No. 17, 2012, pp. 9-17. [14] K. V. Ramanathan, “Toward a Theory of Corporate Social Accounting,” Accounting Review, Vol. 51, No. 3, 1976, pp. 516-528. [15] L. M. Yee, S. Devi and E. W. S. Khin, “Kyoto Protocol and Social Accounting Implication on Global-Warming in Malaysia,” African Journal of Agricultural Research, Vol. 6, No. 6, 2011, pp. 1489-1499.
[1] C. Jasch, “Environmental Management Accounting Metrics, Procedures and Principles,” UN Division for Sustainable Development, Expert Working Group on Improving the Role of Government in the Promotion of Environmental Managerial Accounting, 2001. [2] United Nations, “The Handbook of National Accounting, Studies in Methods Series F, No. 78 Integrated Environmental and Economic Accounting: An Operational Manual,” United Nations, New York, 2000. [3] A. Amran and S. S. Devi, “The Impact of Government and Foreign Affiliate Influence on Corporate Social Reporting: The Case of Malaysia,” Managerial Auditing Journal, Vol. 23, No 4, 2008, pp. 386-404. Hdoi:10.1108/02686900810864327 [4] United Nations, “Division for Sustainable Development,” United Nation, New York, 2001. [5] KPMG, “Introducing the Triple Bottom Line,” 2010.
http://www.kpmg.com/Global/en/IssuesAndIsights/ArticlesPublications/Press-releases/Pages/Kyoto Protocol http://unfccc.int/kyoto_protocol/items/2830.php [6] K. H. Olsen, “The Clean Development Mechanism’s Contribution to Sustainable Development: A Review of the Literature,” Climate Change, Vol. 84, No. 1, 2007, pp. 59-73. Hdoi:10.1007/s10584-007-9267-y [7] L. Shelton, “Techniques and Procedure in International Environmental Law. ‘Environmental Audit,” The United Nations Institute of Training and Research Palais des Nations, Geneva, 2004. [8] K. Schultz and P. Williamson, “Gaining Competitive Advantage in a Carbon-Constrained World: Strategies for European Business,” European Management Journal, Vol. 23, No. 4, 2005, pp. 383-391. [9] H. Y. M. Abdel-Rahim and Y. M. Abdel-Rahim. “Green Accounting—A Proposition for EA/ER Conceptual Implementation Methodology,” Journal of Sustainability and Green Business, Vol. 5, No. 1, 2010, pp. 27-33. [10] V. P. Dorweiler and M. Yakhou, “Environmental Accounting: An Essential Component of Business Strategy,” Asian Institute of Technology Thailand Online, Vol. 13, No. 2, 2004, pp. 65-77. [11] J. Ouellette, “Coagulants and Flocculants Rise,” Chemical Marketing Reporter, Vol. 250, No. 15, 1996. [12] J. Lintott, “The Environmental Accounting: Useful to Whom and for What?” Ecological Economics, Vol. 16, No. 3, 1999, pp. 179-190. [13] F. O. Zadeh and A. Eskandari, “Firm Size as Company’s Characteristic and Level of Risk Disclosure: Review on Theories and Literatures,” International Journal of Business and Social Science, Vol. 3 No. 17, 2012, pp. 9-17. [14] K. V. Ramanathan, “Toward a Theory of Corporate Social Accounting,” Accounting Review, Vol. 51, No. 3, 1976, pp. 516-528. [15] L. M. Yee, S. Devi and E. W. S. Khin, “Kyoto Protocol and Social Accounting Implication on Global-Warming in Malaysia,” African Journal of Agricultural Research, Vol. 6, No. 6, 2011, pp. 1489-1499.