ENVIRONMENTAL ACCOUNTING AS A BUSINESS MANAGEMENT TOOL: A REVIEW

Abstract

This paper reviewed environmental accounting as a business management tool. Successful business strategies depend on the quality and comprehensiveness of information available to decision-makers. Comprehensive management information, including information on environmental costs and opportunities, can yield competitive advantage. Environmental accounting represents a method of measuring the performance of any type of organization (governmental departments, industrial producers, etc.) in relation to the environment and in economic terms. To successfully implement a corporate environmental strategy, decision-makers require precise information about the environmental costs of the company’s products, processes and activities and it a requires the combined skills of multiple disciplines, including environmental managers, economists, engineers, operations managers, planners, scientists, lawyers and management accountants. As a business management tool, environmental accounting uses costing analysis, investment analysis and performance evaluation to improve corporate environmental management practices in order to minimize corporate environmental negative impacts and improve corporate financial performance.