Ecological Management Accounting—Taking into Account Sustainability, Does Accounting Have Far to Travel?

Abstract

Concerns regarding the development of environmental accounting have been around for decades. This work is an update to some of the previous questions around the development of ecological accounting to see how this has changed over the last two decades. The work is based on a systematic review of two journal articles from separate accounting journals. The two articles are by widely published academics and are formative ecological management accounting papers highlighting issues since 2000. The analysis includes a comparative review of the two articles, a review of successive articles in the journals, and a citation analysis. The first general finding is around the complex and confusing terminology that is still used, exemplified in the amorphous term sustainability. Specific findings from the paper analysis include ecological management accounting requires a fundamental change to organization management, different values exploring relationships such as material flows, inclusive of the living and physical world, with a longer time horizon, and a centrality of external factors. Due to these challenges, ecological management accounting is presently not used as a research category and therefore is an un-developed research domain. Environmental accounting is a more commonly used synonym for ecological accounting, though this term is distinct and does not cover many of the ecological challenges. Under this research area, there have more recently been attempts to bridge the difficult macro (planetary) and micro (organization) environmental challenge. Concepts such as Accounting for the Management of Ecosystems and Material Flow Cost Accounting are areas of research seen as offering future opportunities to develop into a more ecological management accounting framework, though this will ultimately require research in ecological management accounting based on a multi-disciplinary approach.

The role and perception of accountants on environmental management accounting in an emerging market: Study on South Africa’s companies.

“…Most of the participants (46%) are not sure whether environmental costs should be reported as such in the annual reports. This supports a study by Kelsall (2020) that emphasize that a lack of sufficient knowledge on environmental costs leaves managers without vital environmental information for key environmental decisionmaking. In addition, this finding act as a solid ground of motivation for accounting bodies such South African Institute of Chartered Accountants (SAICA) to include environmental accounting as a major component of its courses.…”

For an accounting translation of the Anthropocene: fuelling the debate on planetary boundaries

“…This research contributes to the challenge of operationalizing the planetary boundaries concept (Keppner et al , 2020) and we respond to Bebbington et al (2020), for whom accounting can shed light on the relationship between humanity and planetary limits.…”

“…Potentially, the planetary boundaries concept can support the formulation of sciencebased targets (SBTs) for companies. Setting overall and specific SBTs is a societal and political process (Andersen et al, 2021), and as an accounting innovation, SBTs can help individual companies to get into step with planetary boundaries by disaggregating the macrolevel concept of planetary boundaries into meaningful targets for individual companies (Schaltegger, 2018) and, more specifically, for small and local organizations (Kelsall, 2020). However, for climate, a wide range of SBTs can be calculated according to the different baseline and target years, emissions scope and metrics adopted, providing a broad potential for calculations and numbers.…”

“…As a rational myth (Bijon et al , 2022) and utopia (Ntsondé and Aggeri, 2022), the framework intends to make sense of today’s situation, to portray a desirable future to enroll actors in collective action. The most important challenge to the planetary boundaries concept is then the need to translate and operationalize the concept, that is, to put it into practice Keppner et al (2020). To participate in this challenge, the purpose of this paper is to problematize the need for political debate in operationalizing the planetary boundaries framework when accounting for the Anthropocene.…”

“…Indeed, although being scientifically informed, the planetary boundaries framework is a social construct (Biermann, 2012) and the result of social and political choices (Federau, 2017). It has the potential to be incorporated in political and social discourses (Keppner et al , 2020). Moreover, the planetary boundaries concept has a significant heuristic potential to be translated into practical accounting (Schaltegger, 2018).…”