Abstract
Accounting has been increasing its importance. As time goes by, it has spread to sectors such as social, environmental, and others, in which they seek to have financial control of the resources that these sectors possess within. In these sectors, the one that has been most affected has been the environmental sector, largely due to the same social development, because people in their daily lives generate waste that is not friendly to the environment, or they do not have the habit of properly classifying these wastes, which is why this chapter seeks to analyze the importance of environmental accounting by inquiring into different sources of consultation on the subject, knowing the progress made by the implementation of environmental accounting in industrial companies and the positive or negative impact that it has had in different socio-economic environments.
TopIntroduction
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 have mandated enterprises to establish green accounting and to disclose environmental information for the reference of interested parties. The Ministry of Environment Japan defined green accounting as “quantitative assessment of the expenditures and benefits in environmental protection activities” and specified “systematic records and reports, maintenance of a positive relationship between the enterprises and the natural ecology, and promotion of effective and efficient environmental activities, in order to achieve sustainable development”. The green accounting system in EU countries, such as Denmark and the Netherlands, is required by law to disclose environmental information to the government. Countries that have not legislated related laws, such as the U.S. and Japan, have mandated some enterprises to disclose environmental information. In Taiwan, the government has provided guidance to promote the green accounting system. In Vietnam, the government enacted the Environmental Taxation Act in 2010. Multinational corporations are increasingly concerned with whether their suppliers have disclosed green accounting information before proceeding with transactions. It is obvious that green accounting has become a mainstream trend in the world, and legislation of related laws is necessary. 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.
Accounting has been increasing its importance; as time goes by, it has spread to sectors such as social, environmental, and others, in which they seek to have financial control of the resources that these sectors possess. Within these sectors, the one that has been most affected has been the environmental sector, largely due to social development itself, because people in their daily lives generate waste that is not environmentally friendly or does not have the custom of properly classifying these wastes. Additionally, the increase in the trade of vehicles that run on fuel has increased, and this also causes environmental damage, and even in humans. The advance of this problem has increased, and it has been necessary to implement some corrective measures in which several social actors have intervened, such as the State, society, and companies, seeking to mitigate pollution and the risk that it represents for the same society.
Given the above, it is important to analyze. How is it possible to implement environmental accounting in industrial companies? This issue is focused on the high pollution that industrial companies produce to the environment in the country. The main causes of pollution are the chemicals and gases that these companies produce, for which it is important to raise awareness, obtaining a benefit for society and the environment; Therefore, the general objective of this work is to analyze the importance of environmental accounting by investigating different sources of consultation on the subject, knowing the progress made by the implementation of environmental accounting in industrial companies and the positive or negative impact that it has had in different socio-economic environments. Environmental accounting has been gaining importance in organizations since this, and it is possible to measure the costs and expenses incurred for the management of the waste disposal that the productive operation generates, thus becoming a source of information. That serves for decision making and, above all, to define the raw materials used in production.
Key Terms in this Chapter
Green Politics: Green politics, or ecopolitics, is a political ideology that aims to foster an ecologically sustainable society often, but not always, rooted in environmentalism, nonviolence, social justice, and grassroots democracy. It began taking shape in the western world in the 1970s; since then, Green parties have developed and established themselves in many countries around the globe and have achieved some electoral success.
Eco-Tariffs: An Eco-tariff, also known as an environmental tariff, is a trade barrier erected to reduce pollution and improve the environment. These trade barriers may take the form of import or export taxes on products with a large carbon footprint or imported from countries with lax environmental regulations.
Low-Carbon Economy: A low-carbon economy (LCE) or decarbonized economy is based on low-carbon power sources with minimal greenhouse gas (GHG) emissions into the atmosphere, specifically carbon dioxide. GHG emissions due to anthropogenic (human) activity are the dominant cause of observed climate change since the mid-20th century. Continued emission of greenhouse gases may cause long-lasting changes worldwide, increasing the likelihood of severe, pervasive, and irreversible effects for people and ecosystems.
Environmental Enterprise: An environmental enterprise is an environmentally friendly/compatible business. Specifically, an environmental enterprise is a business that produces value in the same manner which an ecosystem does, neither producing waste nor consuming unsustainable resources. In addition, an environmental enterprise rather finds alternative ways to produce one’s products instead of taking advantage of animals for the sake of human profits. To be closer to being an environmentally friendly company, some environmental enterprises invest their money to develop or improve their technologies which are also environmentally friendly. In addition, environmental enterprises usually try to reduce global warming, so some companies use environmentally friendly materials to build their stores. They also set in environmentally friendly place regulations. All these efforts of the environmental enterprises can bring positive effects both for nature and people. The concept is rooted in the well-enumerated theories of natural capital, the eco-economy, and cradle-to-cradle design. Examples of environmental enterprises would be Seventh Generation, Inc., and Whole Foods.
Natural Resource Economics: Natural resource economics deals with the supply, demand, and allocation of the Earth’s natural resources. One main objective of natural resource economics is to understand better the role of natural resources in the economy to develop more sustainable methods of managing those resources to ensure their future generations. Resource economists study interactions between economic and natural systems intending to develop a sustainable and efficient economy.
Eco Commerce: Eco commerce is a business, investment, and technology-development model that employs market-based solutions to balancing the world’s energy needs and environmental integrity. Through green trading and green finance, eco-commerce promotes the further development of “clean technologies” such as wind power, solar power, biomass, and hydropower. AU60: Reference appears to be out of alphabetical order. Please check
Sustainable Development: Sustainable development is an organizing principle for meeting human development goals while simultaneously sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend. The desired result is a state of society where living conditions and resources are used to continue to meet human needs without undermining the integrity and stability of the natural system. Sustainable development can be defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability goals, such as the current UN-level Sustainable Development Goals, address the global challenges, including poverty, inequality, climate change, environmental degradation, peace, and justice.
Circularity: A circular economy (also referred to as “circularity”) is an economic system that tackles global challenges like climate change, biodiversity loss, waste, and pollution. Most linear economy businesses take a natural resource and turn it into a product that is ultimately destined to become waste because it has been designed and made. This process is often summarised by “take, make, waste.” By contrast, a circular economy uses reuse, sharing, repair, refurbishment, remanufacturing, and recycling to create a closed-loop system, minimize resource inputs, and create waste, pollution, and carbon emissions. The circular economy aims to keep products, materials, equipment, and infrastructure in use for longer, thus improving the productivity of these resources. Waste materials and energy should become input for other processes through waste valorization: either as a component or recovered resource for another industrial process or as regenerative resources for nature (e.g., compost). This regenerative approach contrasts with the traditional linear economy, which has a “take, make, dispose of” production model.
Emissions Trading: Emissions trading (also known as cap and trade, emissions trading scheme, or ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants.
Green Economy: A green economy is an economy that aims at reducing environmental risks and ecological scarcities and that aims for sustainable development without degrading the environment. It is closely related to ecological economics but has a more politically applied focus. The 2011 UNEP Green Economy Report argues “that to be green, and an economy must be not only efficient but also fair. Fairness implies recognizing global and country-level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource-efficient, and socially inclusive.”