Abstract
The purpose of this paper is to study the relationship between the environmental and financial performance of Corporates. For the environmental awareness of people, the social responsibility of companies and the environmental policies and laws of government, more and more companies would adopt the system of environmental accounting, and then they would disclosure their environmental performances. From the review of literature and the statistics results on the financial and environmental performances of listed companies which had adopted the environmental accounting system in Taiwan, the results are: 1.the adopting on the system of environmental accounting might make the corporations’ financial performances worse, but not significantly make corporations’ environmental performances better. 2. There should be a positive relationship between the environmental performance and financial performance of companies.
Highlights
Due to the raise of governments’ and enterprises’ environmental performance selfrequirements under the promotion of people's environmental awareness and the requirements of environmental agreements, such as the reduction requirement of greenhouse gas emissions for the Kyoto Protocol, in addition to pursuing their financial performance, enterprises need to incorporate environmental performance into their objectives and decision-making process of business strategies
The International Federation of Accountants (1998) defines environmental accounting as “Environmental Management Accounting (EMA)”, and EMA is the management of the environmental performance and economic performance through the development and implementation of appropriate environmental accounting system which involves with the lifecycle cost, the accounting and estimation of total cost and benefit, and strategic planning. ([6])
The purpose of this study is to explore the relationship between environmental performance and financial performance of the enterprise
Summary
Due to the raise of governments’ and enterprises’ environmental performance selfrequirements under the promotion of people's environmental awareness and the requirements of environmental agreements, such as the reduction requirement of greenhouse gas emissions for the Kyoto Protocol, in addition to pursuing their financial performance, enterprises need to incorporate environmental performance (as the environmental protection concepts of products, the environmental impact of wastes, the social responsibility) into their objectives and decision-making process of business strategies. The system of environmental accounting is designed to help the enterprise improve its environmental performance by recording its direct and indirect costs and benefits for environment-related activities, achieve the objective of sustainable operation for the enterprise. The macro level of environmental accounting system is the measurement on the national consumption of natural resource, green GDP and etc.; its micro level is concerned with the enterprise financial accounting issues pertaining to the environment, as the identification and accounting of environmental cost, and the assist during their decision-making such as cost sharing, capital budgeting and product pricing. In a broad sense, its scope should expand to the working environment of the employees, so the environmental accounting system could be applied to the information disclosure, decision-making and evaluation for enterprise sustainable operation, the analysis of product cost, productivity and competitiveness. Liu and Lu ([9]) suggested promoting the environmental accounting system for environmental improvement, resource utilization rate and sustainable development, etc
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