Industry 4.0 and environmental accounting: a new revolution?

Abstract

The paper seeks to examine how, through environmental accounting, the broader context of corporate sustainability could be incorporated into the developing vision for Industry 4.0, the fourth industrial revolution. An argument is developed that through engagement of the profession environmental accounting could be enhanced and could piggy-back at little extra cost on large actual and potential investments being made in Industry 4.0 infrastructure designed for digitisation of business. Industry 4.0 could be used successfully as a basis upon which to leverage both external environmental accounting and environmental management accounting. A new academic research program is suggested aimed at establishing how Industry 4.0 might facilitate more accurate, high quality, real time environmental management accounting and external environmental reporting in relevant sectors, company sizes, across different management roles and collaborative settings, as well as in supply and value chains. Ways are outlined in which accountants, professional associations and government can help capture the benefits of Industry 4.0 for environmental accounting. These include education and training opportunities and building on efficiency and lower cost notions which are a key part of Industry 4.0. This innovative paper provides first research into the potential of current and expected large investments throughout the world in Industry 4.0 to provide a foundation for improvements in corporate sustainability through greater take up of environmental accounting.

Accounting of Peace: Green Movement in Industry 4.0 (Necessity of Deconstruction?)

“…It also leads to environmental management, how companies achieve a balance between economic goals and environmental control objectives in business 39 operations (Burrit and Christ, 2016). Environmental accounting reports provide information on costs that must be incurred by the company in anticipation of poor environmental quality or sacrifices issued by the company to conserve the environment.…”

“…Data quality and measurement problems in external environmental accounting lead to the comparability and reliability of the reported environmental data into something the company needs to compromise. Skepticism about the truth of the reported disclosure of environmental accounting led to the loss of data credibility (Burrit and Christ, 2016). When the quality of environmental accounting data is still low then it will have an impact in utilization for management decision-making that aims at ecoeficiency.…”

“…Some problems come from poor data quality (timeliness, accuracy, reliability, and comparability of data on accounting reports); what is measured, how the report containing the environmental information is measured and reported; as well as the need for improving the credibility of the data (Burrit and Christ, 2016). These problems are likely to be reduced in the current industry 4.0 based on big data, digitization and integration.…”

“…This proved to increase productivity, earnings growth, facilitate employment and increase investment opportunities (Rubman et al, 2015;Burrit and Christ, 2016). Poor quality data on environmental impacts and operational costs will not be found in Industry 4.0, a work based on automated decision making by intelligence engines will make everything faster detectable, including manufacturing errors or failures that have environmental consequences.…”

“…In relation to these environmental issues, accountants must also be able to work with interdisciplinary strategic teams. They will also be in contact with environmental lawyers as well as engineers to jointly access and use real-time environmental data and collaborate to take eco-efficiency measures (Burrit and Christ, 2016). …”