The growth in environmental accounting research and interest in the last few decades has experienced an optimistic time. Business is not an isolated island apart from the earth any more; the emergency of environmental accounting came from outside stakeholder at the end of 20th century. Following with the rising sense of environment conservation no matter from the public or the companies/organizations, environmental accounting has been pushed to a central stage of nowadays business. This paper firstly provides a brief view of the current development of environmental accounting. Addressed with some questions, it further gives a review of recent research in this area from other scholars and seeks to answer if environmental accounting benefits both the public and business, how to put it into practice for different industries by looking into ten successful companies from “the global 100 list”, which provides the first hundred most sustainable companies in the world wide. The ten companies that I pick up are mostly in the UK despite for one in Finland and another in the US and cover three main industries like the retail industry, food and soft drink manufacturing industry, and tobacco and alcohol industry. Finally the paper concludes with a positive view that it is really good a thing for both sides and also practical despite of the considerable cost. The companies/organizations could be benefit from improving their efficiency and getting better control. The public could get a better and more sustainable living circumstance. But the problem of environmental accounting is its expensive cost, which makes middle or small size companies/organizations not be able to do it. However, there is always something to expect that the improvement of environmental accounting in the future will hopefully solve this problem and cut the cost down. Key words: environment conservation, life-cycle assessment, ecological accounting.
Table of Contents
Enviromental accounting
Abstract
Abbreviations
Chapter 1: Introduction
1.1 What is environmental accounting?
1.2 Legalization
1.3 Why do companies and organizations do it?
1.4 Difficulties in carrying out
1.5 Nowadays Situation
Chapter2: Literature Review:
2.1 Usefulness of environmental accounting:
2.2 Influences brought by environmental accounting:
2.3 Environmental reporting
Life-cycle assessment
Ecological accounting
Chapter 3 Methodology
3.1 The “Global 100”
3.2 Reliability of the “global 100”
3.3 Ten companies from the “Global 100”
Chapter 4: Data Analysis
4.1 Retail industry
4.2 Food and soft drink manufacturing industry
4.3 Tobacco and Alcohol Beverage industry
4.4 Summary
Chapter 5: Conclusion and Recommendations
5.1 Benefits for the companies and organizations
5.2 Benefits for the public
5.3 Issues in carrying out environmental accounting
5.4 Recommendations
The Strategic Governance Assessment Criteria
The Human Capital Assessment Criteria
The Stakeholder Capital Assessment Criteria
The Environmental Assessment Criteria
Objectives and Topics
This paper examines the integration of environmental accounting into modern business practices, exploring whether it serves as a mutually beneficial tool for companies, organizations, and the general public. It investigates the current development status of environmental accounting and analyzes how various successful, sustainable companies apply these practices across different industries.
- The growth of environmental accounting research and its role in sustainable development.
- Benefits and practical challenges of implementing environmental accounting systems in business.
- The impact of legislation and accounting standards on environmental reporting.
- Case study analysis of ten corporations from the "Global 100" list across the retail, food, and tobacco/alcohol sectors.
- Strategies for companies to improve efficiency and maintain public trust through environmental disclosures.
Excerpt from the Book
1.2 Legalization
Regulation of environmental issues is growing rapidly in all countries of the world and keeping up to date. And even national legislation is becoming a specialized field in itself. With specific reference to disclose environmental liabilities, accountants today are required to follow the guidance enacted by the Financial Accounting Standards Board (FASB). According to the accounting principle stated in FASB Statement of Financial Accounting Standards No. 5, “accounting for contingencies”, which is issued in 1975, the contingent liabilities “arising from environmental cleanup costs” are required to be accounted and disclosed. This statement requests that “provision for a loss contingency be accrued and a liability recognized on the face of the financial statements when both of the following conditions are met: It is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements; i.e., it is probable that a future event or events will occur confirming the fact of the loss; and the amount of the loss can be estimated reasonably.”
It means that if the loss is reasonably possible and can be estimated reliably, the loss contingency must be reported, but only as a note to the financial statements. When there is only a tiny possibility of the occurrence of the future event, which might lead to loss; or the amount cannot be estimated reliably, there is no request of either an accrual or a note from FASB, but recommends a note in such circumstances. The FASB has also provided additional guidance regarding loss contingencies in FASB Interpretation No.14 “Reasonable Estimation of the Amount of a Loss”, in which it’s suggested that “the minimum amount of the range should be accrued, unless some amount within the range appears at the time to be a better estimate than any other amount within the range.”
Summary of Chapters
Chapter 1: Introduction: Provides a foundational overview of environmental accounting, its growing necessity in modern business, and the relevant legislative context.
Chapter 2: Literature Review: Synthesizes existing research on the usefulness of environmental accounting, its impact on management and financial reporting, and the methodologies for environmental assessment.
Chapter 3 Methodology: Details the criteria used to select the ten "Global 100" companies examined in the study and outlines the reliability of the research sources used.
Chapter 4: Data Analysis: Evaluates the environmental reporting and policies of ten specific companies across the retail, food, and alcohol/tobacco industries.
Chapter 5: Conclusion and Recommendations: Summarizes findings regarding the benefits of environmental accounting for companies and the public, while offering recommendations for improved reporting and implementation.
Keywords
environmental accounting, environment conservation, sustainable development, financial reporting, life-cycle assessment, ecological accounting, corporate responsibility, eco-efficiency, stakeholders, environmental liabilities, data management, carbon emissions, waste minimization, environmental disclosure, sustainability.
Frequently Asked Questions
What is the primary focus of this work?
This paper examines the integration and impact of environmental accounting within modern business organizations, seeking to determine if it is a practical and beneficial tool for both companies and the public.
What are the central thematic areas?
The core themes include environmental management tools, the legalization of environmental reporting, the benefits of eco-efficiency, and the comparative analysis of environmental practices across different industries.
What is the research question addressed?
The work primarily seeks to answer whether environmental accounting should be applied by all types of companies and whether it truly benefits both business and society, alongside how such practices can be effectively implemented.
Which scientific methodology is utilized?
The study employs a case study approach, analyzing the environmental reporting, policies, and practices of ten selected corporations from the "Global 100" list to evaluate real-world application.
What topics are discussed in the main body?
The main body covers the theoretical framework of environmental accounting, the influence of accounting standards (FASB), and a comprehensive data analysis of specific companies in the retail, food, and alcohol/tobacco manufacturing industries.
Which keywords characterize this paper?
Key terms include environmental accounting, corporate sustainability, eco-efficiency, stakeholder responsibility, and environmental reporting metrics.
Why are retail and manufacturing companies chosen for analysis?
The paper selects these industries to compare how different operational models and business environments adapt to environmental reporting requirements, providing a clearer view of whether these practices are universally applicable.
How does the author assess the cost-benefit of environmental accounting?
The author concludes that while implementing these practices involves considerable costs and technical challenges—often making it difficult for small and medium-sized enterprises—the long-term benefits in efficiency, risk management, and reputation outweigh these burdens for many organizations.
- Quote paper
- Roland Urban (Author), 2005, Enviromental Accounting, Munich, GRIN Verlag, https://www.grin.com/document/53883
