countries— concerning the relation of man to his environment. Threatening signs were visible long ago: the demographic explosion, the inadequate integration of powerful technology with the requirements of the environment, the destruction of cultivated lands, the unplanned development of urban areas, the diminishing of open spaces and the ever growing danger of the extinction of many forms of animal and plant life. There is no doubt that if this process will continue—future life on earth will be threatened” (Encyclopedia of the United Nations and International Agreements, 1990, p. 264).
The U Thant Report was a precursor to the first United Nations Environment Programme (UNEP) Conference on Human Environment in 1972, that was popularly called the Stockholm Conference. T wenty years later, at Rio de Janeiro in 1992, the biggest environmental conference—The Earth Summit—was held to remind the humanity about the perilous state of the global natural environment. In between and thereafter, there were a number of intergovernmental conferences and deliberations (e.g., the World Commission on Environment and Development in 1987, the Johannesburg Conference in 2002), but the indicators that measure the health of our planet continue to decline, e.g.,
•Sea level ri of 10-25 centimeters over the last 100 years;
•Depletion of the stratospheric ozone layer;
•Huge concentration of atmospheric carbon dioxide (CO
2), which may ultimately
result in the ri of average temperature of the Earth by 5° C from the pre-industrial levels—if no immediate steps are taken; and
•Change of the direction of the Gulf Stream that can result in chaos of the whole world climate.
B y some estimates (Letmathe and Doost, 2000), the damage caud to the environment ‘in one day’ entails:
•The destruction of 55,000 hectares of tropical forest;
•The reduction of arable land by 20,000 hectares;
•The extinction of 100-200 species; and
中国真的有僵尸吗•Emission of 60 million tonnes of carbon dioxide (CO
2
) into the atmosphere.
The recently published Stern Review on the ‘Economics of Climate Change’ at the behest of the B ritish government has given even more rious admonitions that an average global temperature increa of only 1° C - 2° C (above pre-industrial levels) could commit 15-40% of species of this planet to extinction. Not only that, other voices (e.g., United Nations’ Intergovernmental Panel on Climate Change) have joined more recently in sounding a red alert, that if the prent trend of environmental destruction is allowed to continue, it may disrupt the global ecological balances, jeopardizing not only the possibilities of a continued economic growth but also the life-sustaining qualities of the earth and lead to an ecological catastrophe. Amidst such
The Icfai University Journal of Environmental Economics, Vol. VI, No. 4, 2008 30
concern for the environment, sustainable development has emerged as a touchstone that has been embraced by the business leaders, politicians, economists, Non-Governmental Organizations (NGOs) and all other concerned groups. The accounting profession has also jumped on the bandwagon to produce jargons like environmental accounting, sustainability reporting, triple bottom line reporting, etc.—albeit without having an agreed definition. However, environmental accounting h
as been accorded a wider role in addressing sustainable development at the national and organizational level.
In India, the National Environmental Policy (NEP) 2006, which was approved by the Ministry of Environment and Forest in May last year, (MoEF 2006) has recommended the u of “standardized environmental accounting practices and norms”in preparation of statutory financial statements for large industrial enterpris, in order to encourage greater environmental responsibility in investment decision-making, management practices, and public scrutiny.
This paper examines the theoretical underpinnings of corporate environmental accounting and explores the various possibilities by which environmental considerations can be infud in the prent accounting model.烫发类型
The Paradigm孔孟朱王
Although the NEP 2006 has suggested the u of “standardized environmental accounting practices”, there are no universally agreed definition of environmental accounting. Yet, the role of accounting in mitigating the environmental problems have been widely discusd and debated in the various national and international forums. It, however, emerges that the role of accounting in the sust
鲅鱼圈山海广场ainable development debate is not straightforward (Gray and Milne, 2002). The points raid in the literature in particular are:
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•Accounting assumptions parallel the standard assumptions of the neoclassical economics in which economy is considered as an isolated system where exchange value circulates between the firm and the houholds. The resultant accounting assumptions–entity, unit of measure, market price, objectivity, for example—disregard any transaction that takes place between the accounting unit (firm or nation) and its natural environment (Moonitz, 1961).
•Current accounting practices, therefore, do not fully or accurately reflect the environmental costs of business operations. At the extreme, accounting practices have been indicted in the prent ecological crisis as a major cau of environmental destruction; the esnce of the arguments is epitomized by Quigley Carroll (1970, p. 9): “The ‘firm’ was an innovation in bookkeeping techniques just as the ‘corporation’ was a legal gimmick. B oth were man-made and imaginary; yet together with the industrial revolution they have made it possible, even likely, that we have already pasd the point of no return in environmental pollution… Establishment of the ‘firm’ was a bookkeeping decision that in calculating profits by subtracting Corporate Environmental Accounting: Theoretical Underpinning of Its Methodology31
‘costs’ from ‘income’, ‘economic costs’ would be included but ‘social costs’ would not be counted”.
• A corollary of the above argument is that solving environmental problems will involve correcting the economic distortions due to the externalities or social costs that require appropriate policy interventions for resources conrvation.
More importantly, it needs a reorientation of the economy as well as the social attitudes towards a more radical concept of ‘sustainable development’. Sustainable development is esntially the principle that the prent generation should leave to its successor, a legacy of natural and other man-made capital that is no more depleted than the one it received from its parents. It is esntially an ethical concept, but as an economic strategy it entails calculation of the environmental costs of our prent consumptions (Pearce et al., 1989).
•Sustainable development has been defined by the World Commission on Environment and Development as the “development that meets the needs of the prent without compromising the ability of the future generations to meet their own needs” (WCED, 1987, p. 42). However, due to the vagueness in the widely quoted definition of ‘sustainable development’, it has been accorded a wider meaning to encompass a myriad of ideas, so much that it has been likened to a T rojan hor of wor
ds, a term quite sufficiently empty that it can be filled at will by different urs to hold their own meaning and intentions (Adams, 1990, p. 4).•The post-B rundtland diversification of meaning has been responsible for a plethora of definitions—about 70 in number (T rzyna, 1995). However, they esntially boil down to two paradigms—the deep green platform and the pale green platforms (Gowthrope, 1998). The deep green approach is esntially revolutionary, involving
a complete rejection of the current economic model and, therefore, of accounting.
It also entails an end to anthropocentrism in human kind’s priorities, widespread population control, an end to adherence to the ideal of economic growth philosophy and a revision of human ‘wants’ to human ‘needs’ (Schumacher, 1973; and Dally, 1992). Reduced to its fundamentals, there would appear to be little u for any conventional accounting in such revolution. Maunders and B urrit (1991), Hines (1991) and others have, in fact, explicitly suggested that even more accounting is not going to deliver us from the environmental crisis. The advocacy of the deep green radicals, in fact, goes beyond a mere critique of the rules of economics, and for that matter the need of accounting, but it requires nothing less than the invention of new institutions for a different, non-market economy.
Gray (1992) has sympathy for the deep green arguments but he also obrved that it proves difficult to “translate radical insights into suggestions for actions” (p. 400).
东北煎饼巅造句Gray (1990) also rais the question of language to carry out deep green suggestions into concrete actions: “We can only think about tho things for which we have the words and our words and concepts have been dominated by the frameworks of neoclassical economics”. In short, the radical deep green arguments provide
The Icfai University Journal of Environmental Economics, Vol. VI, No. 4, 2008 32
fundamental critique of the neoclassical underpinnings of accounting, but its abstract theorizing produces no better solution than mere non-action.
•The alternative paradigm put forward by the supporters of the reformist pale green platform advocates that one may successfully pursue social or environmental, and traditional financially-oriented goals largely, simultaneously, within the workings of the market economy. The pale green approach is esntially ‘technocratic’, since it has a belief that the way to tackle our environmental problem is by a process of objective analysis, bad on the provision of better information. This being the fundamental plank of the pale green reformists, clearly envisages a role for accounting in the emerging agenda of corporate environmentalism, where accounting information is a way of looking at what constitutes good or bad organizational performance. As Anthony Hopwood (Owen, 1
992, p. 22) succinctly argues, the fundamental strength of accounting lies in its ability to make visible and disciplined performance. Nevertheless, there is also a pressing need to reform accounting practice from inside, so that the wider aspects of organizational performances are captured, and hence entered into decision-making process. There is, in fact, advocacy for greater openness in the pale green model of accounting.
As Gowthrope captures the tenor of the pale green model of accounting,“The approach is incremental, gradual, relative; for example, emission levels are to be tackled gradually by governments tting a ries of small targets. In this perspective accounting will be led through an evolutionary process, to gently adapt it so as to include tho things which have been excluded and to count and value tho things which hitherto have been uncounted and therefore, unvalued’’.
(Gowthrope, 1998, p. 176).
The pale green model of accounting also allows accountants to spread the net of traditional accounting much wider, to incorporate data in terms of both financial and physical quantities. This is an evolving model of accounting, since as a means to ‘growing’ accounting it also contemplates other means such as ‘narrative accounts’ to capture more and more environmental effects (Gowthrope, 1998, pp. 176-177).
T o epitomize, the pale green model is an optimistic approach to thinking about the environment and accounting. It assumes that many of the environmental problems, including tho things traditionally regarded as ‘externalities’ can be absorbed into it and thereby greater accountability and more realistic decision-making will result. Definition and Framework
Although the pale green model of environmental accounting has attracted sober support from the academic and major accounting rearch bodies from all over the world, the lack of preci definition reflects the naivety as well as the considerable uncertainties over what it might actually mean in practice.
A review of the literature involving the phra “environmental accounting” shows that it appears to mean different things to different people. At the national income accounting level, it has been variously interpreted as referring to physical inventories of natural resources, Corporate Environmental Accounting: Theoretical Underpinning of Its Methodology33
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