Abstract
The paper deals with the environmental costs (EC) in the electrical equipment industry by using environmental accounting as a strategic instrument for controlling the economic entity (EE). The novelty of the study consists of integrating a mathematical model in environmental management accounting (EMA), starting from the identification of the types of waste generated by the production flow and the interaction between the production activity and the environment, which results in determining the EC per entity. The research also analyzes the dependence between the resulting waste and the volume of production by categories. The usefulness of determining these dependencies leads to the identification of the product categories with a significant influence on the EC. The study is useful for developing an environmentally sustainable accounting system within entities in the electrical equipment industry because based on the mathematical model, products that generate large quantities of waste can be identified, allowing the outline of managerial strategies to reviewing production technologies, in order to optimize the products and reduce the quantities of waste generated.
Highlights
In line with increasingly stringent environmental regulations, industrial costs for environmental protection have increased rapidly over the past 40 years (Gerasimova & Silka, 2019; Gray, 2010; Jasch, 2003)
In the economic entity (EE) under analysis, it results in a series of wastes at different times of the activities, namely: from unpacking raw material usually packed in cardboard or plastic bags; from processing related to the production processes
Environmental accounting contributes to the formation of investment plans regarding ecological technologies that aim to design and market products with the least environmental impact while minimizing the total environmental costs (EC) per EE
Summary
In line with increasingly stringent environmental regulations, industrial costs for environmental protection have increased rapidly over the past 40 years (Gerasimova & Silka, 2019; Gray, 2010; Jasch, 2003). EC are those costs of the actions taken by an EE and by third parties on behalf of an EE for preventing, reducing or repairing the environmental damage resulting from operational activities These costs include: storage and disposal of waste, soil protection, ground and surface water protection, clean air and climate protection, noise reduction, biodiversity, and landscape protection (European Commission, 2001). Another global body believes that these “include the costs of the measures that should be taken, in order to manage the environmental impact of a company’s activity, in an environmentally responsible manner, as well as other costs determined by the environmental goals and requirements of the enterprise” (United Nations Conference on Trade and Development [UNCTAD], 2001). EC may include but are not limited to: waste disposal, soil, air, ground and surface water protection, noise pollution reduction, biodiversity and landscape protection (Grubb et al, 2019; Ionescu, 2017)
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