environmental accounting design - Covenant University Repository

Total sustainability cost X
Profit after tax per the financial
Accounts X
Environmentally sustainable
/adjusted profit X
Source: Researcher’s Work (2008); adapted from Howes, R. (2002:32-33): Environmental Cost Accounting: An
Introduction and Practical Guide, CIMA
4.13 REPORTING OF FINANCIAL STATEMENTS TO EXTERNAL PUBLIC AND
ACCOUNTING INFORMATION USERS
According to Leckiss (1991:6), ‘We must measure up to the environmental challenge if
we are to fulfill our duty as a profession to promote the public interest. We forget at our peril
that we do not own our natural assets, we merely hold them in trust for future generations.’
Gray and Bebbington (2001:221), reveals that ‘why accounting is so closely implicated in the
environmental crisis is that a company, an industry, an economy can be showing very positive
‘success’ indicators in the form of profits and growth whilst, simultaneously, polluting the air
and the sea, laying off staff, destroying habitats, and disrupting communities.’ This
phenomenon is the least expected for eco-efficient sustainability. Organizations increasingly
face the reality of waste disposal costs, increases in the costs of plant to accommodate
environmental improvements and increased costs to meet requirements of Environmental
Management Systems (EMS), Gray and Bebbington provides some environmental costs
measurements such as in Figure 5.1
4.14 THE UNITED STATES SUPERFUND
In 1980, the United States issued the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) and ushered in a new era of
environmental management with very specific accounting implications.
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