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  • Contemporary Issues in Accounting: Essay topic: You are required to develop a research topic in the social and environmental accounting research area, in this topic ( The influence of companies' and industries' reporting on social and environmental

Contemporary Issues in Accounting: Essay topic: You are required to develop a research topic in the social and environmental accounting research area, in this topic ( The influence of companies’ and industries’ reporting on social and environmental Example

«The influence of companies’ and industries’ reporting on social and environmental economic»


The main aim of this research paper in respect to companies and industries is to examine the state of environmental management accounting, practice and motivation and reporting through disclosing information to the public with an idea to improve the environment and reduce costs. Suggestions regarding to earlier research put emphasis in the need for environmental management accounting as a tool aimed at supporting factors concerned with the environment.


The past 20 years have witnessed the growth of Australian urban population growth, which has seen an increase in pressure on land, waste management and resources throughout territories and States (ABS, 2004). The waste generated annually in Australia is significant making it one of the highest. This presentation concerning the society is invisible and unavoidable towards the society hence making it an environmental crisis.

Companies and manufacturing industries have played key roles in response to one third of Australia’s solid waste. This is significant through demonstration of waste management (Environment Australia, 2001). The Consideration manufacturing industries and companies public sector organization, there have been peculations regarding these two players which are regarded as better positioned to sustain developments to the community with reference to direct relationships that exist between the two parties (Lewis, 2000). Following this, companies have been encouraged to develop management systems involving policy-making and planning thus involve sectors in the local community fulfill objectives that relate to the environment (Mercer and Jotkowitz, 2000). In terms of environmental management, companies and manufacturing industries have set aside billions of dollars indicating their commitments, aims and objectives of improving the environment regardless of increase in population and waste. Through strategies put in place, companies and industries have tried to contain and manage waste. This is by far significant in terms of achievements compared to other solid waste sectors (Resource NSW, 2003).

Literature review

The literature review pertaining to this research has two divisions. Firstly, it concerns the need for research into reports pertaining to environmental management accounting of companies and industries waste and recycling management and secondly, the study concerns the potential motivations for environmental management and accounting from which reviews from different theoretical perspectives arise.

Environmental Accounting in Local Government Waste and Recycling Management

This aspect involves the identification, collection, analysis and use of information gathered from a wide perspective that assist in internal decision-making (Schaltegger and Burritt, 2009). Environmental Management accounting terminology incorporates terms such as “true”, “full”, “total”, comprehensive” and “life cycle” which put emphasis on conventional management approaches. These aspects are incomplete in scope as they overlook significant environmental benefits and costs (USEPA, 1998a). As an important aspect, the Environmental management for accounting has recognition in the Australian National Strategy regarding an Ecological and Sustainable Environment (NSESD) (Australian Ecologically Development Steering Committee, 1992). It encourages pricing and charging structures such as companies and manufacturing industries in a way that reflects the full economic and environmental costs that involve waste disposal. Thus, sustainable solutions and waste management need timely and reliable accounting information, supported by companies and industries, which influence environmental factors. This justifies the environmental and economic efficiency of waste prevention programs (Wright, 2002).

There has been significant improvement in a variety of frameworks and approaches to incorporate the environmental accounting information into waste and recycling management. Research conducted in the early 1990s show concern of the efficiency of direct operational cost and material flow information on waste collection and waste program designs by companies and industry players (Shapek, 1993). A number of assessment methods developed by researchers incorporate “full costs” and “life-cycle” costs aid in waste and recycling management.

Motivations from different theoretical perspectives

Surprisingly, no commonly used theoretical perspectives on managerial motivations for environmental accounting in companies and industries exist. Many scholars have applied the legitimacy theory to account for environmental and social reporting practices by companies and manufacturing industries and their influences (Deegan, 2002). The theory emphasizes those activities by companies that need to be congruent with social values in a broad social system. If a company’s perception by society operates within the bounds of an acceptable value system, this renders companies and industries as legitimate hence can survive and grow (Dowling and Pfeffer, 1975).

For these sectors to prove that they fulfill demands from the society, it is vital that these companies and industries disclose relevant information concerning the environmental economy. This can be information regarding the environmental aspects, which show that these organizations conform to societal expectations or are trying to influence or alter perceptions of the public towards the them (Lindblom, 1994). Another theory confirming this is the stakeholder theory, which focuses on the interplay and communication between stakeholders and the companies. Thus, its implication is that additional emphasis be put on the opportunity dimension of stakeholders’ analysis due to the interests of these companies, which can be nurtured by an interactive and symmetrical two-way communication with its stakeholders.

The institutional theory considers the company as part of a large social system in which it operates. Unlike the legitimacy and stakeholder theories, the development of institutional theory occurs within the context of management literature. With the essence of achieving legitimacy, institutional theory focuses on a much broader view of the social system surrounding organizations. It explores different mechanisms through which information about legitimacy and socially acceptable organizational/company behavior can be transmitted, and such behavior institutionalized within organizations/companies. The broad views are wider in the range as opposed to legitimate and stakeholder theories.


Companies and industries as a societal member receive influence through expectations from other key members of society. In this case, the companies’ environmental management accounting practices in waste management needs equality towards behavior in the wider social structure. Theories based on social systems such as the legitimacy, stakeholder and institutional theories seem relevant. Among these, the institutional theory best explains findings of this study. Thus, the institutional theory explores different roles used by various members of the society with an aim to influence internal management activities and behavior in companies so that the activities and behaviors are consistent with rules and norms institutionalized by societal members. This research covers a broad range of explanatory factors, which relate to social influences.

These factors reflect different, as well as mixed social institutional influences regarding development of environmental management accounting in companies and manufacturing industries regarding waste management. Regulator rules and targets by the state government’s data requirements, suggest the involvement of coercive pressure for compliance, as noncompliant companies and industries are due for legal sanctions. The local community’s expectations towards the environment can be influenced by company reporting of environmental economics through normative processes, and in turn govern changes of environmental management accounting in companies and industries concerning waste management or through a coercive process as lack of noncompliance with community expectations may result to loss of power or position. Results provided for this research indicate that the institutional and contingency theories represent perceptions into the motivations for environmental management accounting company and industry environmental management.

In the research, the institutional and contingency theories, in case of environmental management accounting for waste management, offer different but complementary explanations as discussed in the research.


This research explores the practices of environmental management accounting and motivational practices in the context of the company and industrial environmental waste, management. Sustainable waste solutions are inevitable thus require awareness of the real cost and broad spectrum of information, which is available in respect to conventional accounting systems. While this is the case, there is little proof concerning how far environmental management accounting has changed in this area. Therefore, it is paramount to involve such ideas in determining sustainable waste management solutions by companies and manufacturing industries. Thus, the main aim of designing this research is to meet the needs of such research concerning company, manufacturing industrial waste, and recycling management. Companies as public sector organizations may not have difficulties in understanding social obligations. This also emphasizes why companies and industries local government assumes a role of an institution connected to change. Apart from complying with legislations and regulations, local governments’ aims at improving waste service delivery hence reduce costs at the same time. This improves output performance of waste management instead of focusing on input spending and compliance.


Australian Bureau of statistics (ABS) (2004), Environment Expenditure: Local Government,

Australia 2002-2003, Catalogue no. 4611.4610, ABS, Canberra.

Australian Ecologically Sustainable Development Steering Committee (1992), National Strategy

For Ecologically Sustainable Development, Australian Government Public Service,


Deegan, C. (2002), “The legitimizing effect of social and environmental disclosures – a

Theoretical foundation, accounting”, Auditing & Accountability Journal, Vol. 15 No. 3,

pp. 282-311.

Dowling, J. and Pfeffer, J. (1975), “Organizational legitimacy: social values and organizational

Behavior”, Pacific Socialogical Review, Vol. 18 No. 1, pp. 122-36.

Environment Australia (2001), Australia State of Environment 2001: Human settlements,

Environment Australia.

Lewis, L. (2000), “Environmental audits in local government: a useful means to progress in

Sustainable development”. Accounting forum, Vol. 24 No. 3, pp.296-318.

Lindblom, C. (1994), “The implications of organizational legitimacy for corporate social

Performance and disclosure”, paper presented at the Critical Perspectives on Accounting

Conference, New York, NY.

Mercer, D. and jotkowitz, B. (2000), “Local Agenda 21 and barriers to sustainability at the local

Government level in Victoria, Australia”, Australian Geographer, Vol.31 No.2, pp. 163-

NSW department of Environment and Conservation (2003), Local Government Action Plan –

Contributing to Waste reduction and resource recovery in NSW, consultation paper,

NSW Department of environment and Conservation, Australia.

Schaltegger, S. and Burritt, R. (2000), Contemporary Environmental Accounting Issues,

Concepts and practice, Greanleaf Publishing, Sheffield.

USEPA (1998a), “An introduction to environmental accounting as business management tool”,

In Bennett, M. and James, P. (Eds), The Green Bottom Line: Environmental Accounting

for Management Current Practice and Future Trends, Greenleaf Publishing, Sheffield.

Shapek, R. (1993), “Data collection and analysis to improve the quality and effectiveness of

Recycling education programs”, Resources, Conservation & recycling, Vol. 9 No. 3

pp. 223-34.

Wright, T. (2002), “Shaping the vision and strategy for sustainable waste management in New

South Wales”, background paper, Resource NSW.