ABSTRACT
Chapter 12 looks at the role of accounting, reporting and finance in making companies more environmentally sustainable. Following a brief overview of conventional accounting and reporting, the business case for environmental accounting and reporting, also known as sustainability or triple bottom line accounting and extended reporting, is made, taking into account legitimacy concerns and stakeholder pressure (e.g. from investors). The various forms of accounting for sustainability are then introduced, drawing parallels with conventional accounting between (internal) management accounting and (external) financial accounting through environmental management accounting and external environmental accounting. A number of standards and tools are introduced, including the Global Reporting Initiative (GRI) with inclusiveness, materiality and comparability as key, Integrating Reporting based on six types of capital, ISAE 3000 and AA1000AS for auditing and assurance for sustainability, carbon and other footprinting, and environmental (cost) accounting methodologies, such as life cycle and activity-based costing, environmental profit and loss statements, and full or true cost accounting. An overview of various global and national initiatives for green finance is provided including greening finance and financing green, rating schemes, positive and negative screening, before examples and practices round off the chapter. A summary and suggested questions and activities are provided.
