Sustainability 7, 2015

ANALYSIS ON THE RELATIONSHIP BETWEEN GREEN

ACCOUNTING AND GREEN DESIGN FOR ENTERPRISES
Jui-Che Tu and Hsieh-Shan Huang - National Yunlin University of Science and
Technology
Introduction
Human activities have led to damages to the environment, including
depletion of natural resources, environmental pollution and abnormal climates.
The global consensus at present is to promote sustainable development, among
which corporate social responsibility (CSR) is most closely associated with
business.Many countries around the world havemandated enterprises to establish
green accounting and to disclose environmental information for the reference of
interested parties.
Once green accounting is enforced by the government, enterprises are
required to internalize the external costs of the production activities, thus
increasing the production and operational costs. Hence, in order to maintain the
current profits or to lower costs, enterprises must make improvements in product
design, such as green innovation or product redevelopment. The impact on
product R&D and production will be unavoidable. To address this problem, this
study aims to analyze the impacts according to the Green Accounting Guidelines
and to apply the concept of green design for product redesign. The findings can
provide a reference for enterprises to prepare for the green trend.
Literature Review

Research Design

This additional expenditure is incurred because the product pollutes the

environment, but has long been neglected by the manufacturer or is being
handledby the government. Under green accounting, the manufacturer is
responsible for the environmental pollution, and it is a problem ofthe product

itself. This group contains seven other cards, including pollution control cost,
waste fluid monitoring cost, waste management cost, penalty or compensation
cost, environmental improvement cost, soil recovery cost and environmental
settlement or compensation cost.
Conclusion
1. The impact of green accounting on enterprises: Due to the CSR of
enterprises, green accounting is the unavoidable trend. Production should
notneglect environmental production and the production of low-cost and
low-pollution products. Production and product design will be impacted.
2. Efforts of green design in environmental protection: Green design has
been developing for more than 30 years so far and has obtained positive
affirmation in many studies, also including the quote in this paper. It has
been the consensus around the whole world that green design is helpful for
environmental protection.
3. The aspects of system and technology complement each other: Green
accounting is the system aspect, that is the government makes policies
about what enterprises should do. In order to deal with the problem of
energy savings plus production increasing and to prevent. During the
process of corporate business activities, green design can provide
technology support for dealing with the negative externalities problem.
The method of innovative technology can also increase the resource
productivity.

International Journal of Economics and Financial Issues 5 (2), 2015

THE IMPACT OF ENVIRONMENTAL ACCOUNTING ON
STRATEGIC MANAGEMENT ACCOUNTING: A RESEARCH ON
MANUFACTURING COMPANIES
Ahmet T and Kadir G Turkey
Introduction
The influence of environmental factors on the decision making process of
the companies increases day by day. This increased influence forces enterprises to
minimize their environmental costs, include environmental factors in the strategic
management decisions and try different ways to cope with increased competition
conditions. They reduce various costs by minimizing the operating costs using
strategic management accounting methods, which are the most important
techniques to reduce the costs.
Recently, the reason for the increasing importance of environmental
factors can be explained by commitment of enterprises to the concept of social
responsibility; because, as a requirement of the concept of social responsibility,
recognition of environmental factors has become widespread among companies.
For this purpose, both environmental accounting and strategic
management accounting data are seen as one of the most important ways to
survive in this competitive environment. In addition, the increased influence of
corporate activities regarding environmental issues conducted by stakeholders has
led to an increase in the environmental costs.
Objective and Significance of the Study
In this study, it has been aimed to investigate the sensitivity of
manufacturing companies operating in the organized industrial zone of Diyarbakr
to environmental issues and environmental accounting approaches within the
scope of social responsibility accounting
applicability

of

as

well

as

investigating

the

these concepts in the enterprises. The staff of accounting

departments of these companies was asked about environmental accounting

subjects and applicability of these concepts in their operating activities. The
research was conducted on 81 out of 196 companies operating in the organized
industrial zone of Diyarbakr. In this sense, the findings of the study are limited
since not all the companies are included and cannot reflect all the characteristics
of the universe.
Finding and Suggestions

As a result of the study conducted, some of the basic findings obtained from the
responses

of

accountants

or

managers

of accounting departments of

manufacturing companiesoperating in the organized industrial zone of Diyarbakr

are as follows:
It has been observed that managers of enterprises included in the study
have general idea about concepts and approaches of

environmental

accounting; however, they dont have sufficient information about

applicability of this information, therefore they do have an absence of
knowing the importance of strategic management accounting data.
Although this lack of information may not cause any problem in terms of
competition with other companies in the city, it may lead them to stay
behind in terms of national and international competition.
Considering the averages of the responses obtained, they answered
all questions in the questionnaire form as agree.
The environmental accounting has gained importance in order to deal
with global competition which forms the basis of strategic management
accounting; because environmental costs can be minimized by applying
strategic management accounting techniques.
It is very obvious that environmental accounting data, which is one of the
branches of social responsibility accounting, affect both national and international
image of a company. The importance of environmental accounting data is
increasing in order to reduce costs, increase the added value of enterprises and
survive in this competitive environment by implementing strategic management
accounting techniques. At the same time, environmental problems cause
aggravated circumstances in terms of competition between companies.

It is very obvious that the importance of strategic management accounting

data increases day by day in order to survive in these harsh conditions. For this
purpose, companies need to pay attention to the existing or future costs caused by
environmental problems by strategic cost management, which is one of the
strategic management accounting techniques

International Journal of Humanities and Social Science 13 (8), 2013

ENVIRONMENTAL ACCOUNTING AND FIRM PROFITABILITY: AN
EMPIRICAL ANALYSIS OF SELECTED FIRMS LISTED IN BOMBAY
STOCK EXCHANGE, INDIA
Daniel M and Ambrose J Kenyatta University Kenya
Introduction
Environmental reporting of Indian companies can be broadly categorized
into two types mandatory disclosure and voluntary disclosure. Preliminary
investigation of this study shows that Indian companies practice more of
voluntary environmental reporting in the form of satellite reporting, sustainability
reporting, GRI reporting and internet reporting.
In India,

financial accounting & reporting guidelines are issued and

governed by the Institute of Chartered Accountants of India (ICAI). Companies

Act

mandates

the

preparation

of

annual

accounts

of

companies

in

accordance with the accounting standards issued by ICAI (Chatterjee, 2005).

Specific environmental accounting rules or environmental disclosure guidelines,
for communication to different stakeholder groups, are not available for Indian
companies.
There is no mandatory requirement for quantitative disclosure of
(financial) environmental information

in annual reports neither under the

Companies Act nor as per Indian Accounting Standards (AS's) Further more
there are 23 stock exchanges in India, governed by the Securities and
Exchange Board of India (SEBI) Act 1992. Each of these stock exchanges has
different listing requirements. However, there is no mandatory SEBI listing
requirement for Indian companies, from these stock exchanges, to disclose
environmental information. Therefore, any environmental disclosure by Indian
companies is purely voluntary.

Research Hypotheses
Ho1: There is no significant relationship between Environmental Accounting
and Return on Capital Employed.
Ho2: There is no significant relationship between Environmental Accounting and
Net profit Margin.
Ho3: There is no significant relationship between Environmental Accounting and
Dividend per Share.
Ho4: There is no significant relationship between Environmental Accounting and
Earnings per Share.
Limitation of the Study
Empirical research on corporate environmental disclosure is available
largely for developed nations and very few is available for Asian countries. This
research is probably one of the very few initial research works with respect to
environmental accounting by Indian corporate. Hence, the extent of prior
research literature available on environmental accounting reporting by Indian
companies is limited. The sample size considered for this research is too small to
generalize and conclude for diverse sectors of Indian companies. There is scope
for doing further theoretical and action research in this field.
Empirical Analysis
Using the T- Ratio to test for their statistical significance, it is
evident that only NPM and DPS variables are statistically significant. This is

due to the fact that their observed T- values are positive and above the rule of
thumb of 2. The other variables are statistically insignificant because their
observed t-values are either negative or far less than the 'rule of thumb' of 2. From
the R- squared of 0.859172, the regression co-efficient indicates that about 83% of
the changes in the dependent variable are explained by the changes in the
independent variables. The F- value of 12.95815 indicates that the parameter
estimate cannot be dismissed at 5% level of significance. This is due to the fact
that the calculated F- value is more than the critical K-value. The D.W statistic of
2.149650 indicates the absence of auto-correlation since it is up to rule of Thumb
of 2. In the course of this research, some hypotheses were formulated and they
include:
Ho1: There is no significant relationship between Environmental Accounting
and Return on Capital Employed.
Ho2: There is no significant relationship between Environmental Accounting and
Net profit Margin.
Ho3: There is no significant relationship between Environmental Accounting and
Dividend per Share.
Ho4: There is no significant relationship between Environmental Accounting and
Earnings per Share.
Conclusion
Environmental costs cover all cost; incurred concerning environmental
protection such as emissions treatment as well as wasted material, capital and
labour which so called non product output as a result of inefficiency
production activities. Different firms may consider different elements into
environmental costs but it is important that all significant and relevant costs are
incorporated for sound decision making purpose. The general picture, which
emerges from current reporting, is that since the disclosures of environmental
information are voluntary, there is a diversity of reporting practice.

American International Journal of Contemporary Research 4 (6), 2014

ENVIRONMENTAL ACCOUNTING OF THE RICE INDUSTRY IN
SOUTHERN BRAZIL
Cristina K, Melissa W, and Miguelangelo Brazil
The results of the exploratory study held in the Southern of Santa
Catarina and in Rio Grande do Sul, are in accordance to the previews
studies and researches. It was found that, by means of results obtained by
the questionnaire applied, that the organizations studied develop several
actions towards environmental issues and know environmental laws; however,
they do not require that accountants a proper accounting in order to know the
values related to environmental accounts and actions. There is no practical
application in the accounting of the rice industries studied with respect to the
illustration and quantitative recording of expenses and environmental revenues
created.
This study pointed that the accountants responding to the questionnaire
recognize the existence of environmental accounting facts and events in the
rice industries in which they operate, but do not apply the environmental
accounting to separate environmental accounts from traditional accounts. It is
believed that one of the probable reasons for this is the lack of clarity and/or
knowledge about this accounting activity. This reason was pointed by other
researchers such as Calixto (2010), Catalisa (2010), Gale (2006) and Herbohn
(2005).In addition, the fact that there is no legal requirement to the use of
environmental accounting in industries is a relevant aspect to be considered, i.e.,
since there is no legal mechanisms to determine the use of accounting of
environmental accounts, the accountants do not try to apply their technical
knowledge and state that this accounting would be more labor intensive.
From the early investigations held in this study, it is important to mention
that the accounting in rice industries cannot be limited to quantitative recording
and measuring of the assets. It is crucial that this subject takes part of scientific

studies and in practical applications in the organizations with the objective

of creating effective accounting structures with useful environmental information
to organizational management. It is also considered that the challenges related to
environmental responsibility, which comes from society demands, has required
thatindustries are aware of their obligation with the careful use of natural
resources, so that these resources can be available for future generations. Such
challenges still need that organization concern with the requirements of
environmental responsibility and the participation of the accountant to
support the decision makings toward sustainable development.
As a conclusion, it was observed that environmental accounting plays an
important role in structuring the chart of accounts accordingly to the
characteristics of rice industry. In this sense, the context of the environmental
chart of accounts application together with observing the current legislation is
essential factors.

Asia Pacific Journal of Research 1 (14), 2014

GREEN ACCOUNTING AND REPORTING PRACTICES AMONG
INDIAN CORPORATES
Dr. Minimol and Dr. Makesh Kerala
Green accounting popularly called environmental accounting; resource
accounting or integrated economic and environmental accounting refers to
accounting practices incorporating the environmental costs, impacts and
consequences. It is about aggregation of data that links the environment to
the financials of the company, which will obviously have a long-run impact on
both economic and environmental policy of the organization. It is something
more than merely undertaking social cost benefit analysis of various projects
or activities of the company or valuation of environmental goods and services
produced.

It is an effort to identify and portray the exhausted resources and cost

rendered by organizations in return, to the environment.

Green accounting is all about bringing transparency in accounts as to
environmental costs. It even tries to quantify both in money terms as well as in
physical units - the costs and benefits enjoyed by an organization because of its
contribution

towards

environment

related

activities.

Generally green

accounting involves the identification, measurement and allocation of

environmental costs, integration of these costs into business, identifying
environmental liabilities, and communication the results to the stakeholders of
the company as part of financial statements.
Green/Environmental Reporting is the term popularly used across
nations for disclosure of environment related data, audited or not, regarding
environmental risks, environmental impacts policies costs and liabilities.
Corporate environmental protection should include environmental reporting
initiatives taken by the enterprise, the adverse impact of its production
process and products on the environment both in quantitative and qualitative
terms and its initiatives in process and product innovations in order to achieve
sustainable growth.

Green accounting is an important tool for understanding the role

played by the natural environment in the economy. Environmental accounts
provide data which highlight both the contribution of natural resources to
economic well-being and the costs imposed by pollution or resource degradation.
Business houses are using various natural resources to carry out the
business activities without any hindrance. The industries should focus and set
aside a part of their funds for environmental protection and ecological balance.
Thus business organizations are expected to account for the use of
substances which may damage the Environment.
Green Accounting - The Conceptual Mode
The study developed a model which specifies six aspects to be covered in
environmental accounting in order to measure the ultimate environmental
performance of the organisation. The aim of this model is to present a novel
view of the different activities to be undertaken by organizations to facilitate
environmental accounting and reporting.

Conclusion
Environmental accounting and reporting practices are in the nascent stage
in India. Even though Indian corporates comply with the rules and regulations
with regard to environmental protection, till now no clear cut policies are
framed and formulated at the National, State or even at the company level, for
ensuring the level of compliance to environmental norms.

This study was

intended to find out the major environmental parameters reported by Indian

Corporates as part of their Environmental reporting practice. The study also
focused on

the extent to which Indian Corporates practice, voluntary

environmental reporting with regard to the environmental parameters identified.