Globally, in the business, social, cultural and political world, decisions have been made consciously or unconsciously, which harm the planet's resources and all this affects the quality of life of future generations. For this reason, it is important to obtain measurable results of the impact on the environment in order for the public and private sector actors to take the necessary corrective measures. This is where environmental accounting will play a very important role, as it is a fundamental tool for obtaining quantifiable data that helps users with decision-making.
Keywords: Sustainability, environmental and social accounting, ODS.
Background of environmental accounting
As for the background of environmental accounting, accounting throughout history as mentioned by Casson (2018) has been influenced by the socioeconomic environment in which it is developed, so it has been adapted and updated to the changes that this medium undergoes. Hence, the current trend is that accounting is not only limited to presenting traditional financial statements but rather reports that reflect the particularities of environmental and social reality.
Therefore, we speak of a social accounting related to the commitment of economic entities with society, the environment and its human resources; Likewise, environmental accounting is discussed, which has the objective of measuring the impact of the decisions of a government or company on the environment in economic terms (Mejía Soto et al., 2014).
Cardona and Velásquez (2017) mention that environmental or environmental accounting emerged as a proposal in 1996, as a response to the denunciation of risk and environmental damage at the Stockholm Environment Conference in 1972, before which the United Nations Organization integrated the World Council for Sustainable Business to evaluate and promote common sense in the production of goods and services, promote and develop eco-efficiency in organizations, their socio-environmental commitment and consider their economic consequences (Chen, Lupi, Viña, He & Liu, 2010).
Subsequently, the Rio + 20 conference held in Rio de Janeiro in June 2012, galvanized a process to promote the adoption of a new body of Sustainable Development Goals that allow the continuation of the momentum generated by the MDGs or Millennium Development Goals within of a global development framework beyond 2015 (Leal et al, 2018).
In July 2014, the Open Working Group of the United Nations General Assembly proposed a document with 17 objectives for approval by the General Assembly in September 2015. This document established the guidelines for the future negotiation and approval of the new SDGs and the global development agenda for the period 2015-2030. Finally, on September 25, 2015, within the framework of the 70th edition of the United Nations General Assembly, in New York, all the countries of the world adopted the 2030 Agenda for Sustainable Development, the framework document that will govern the activities to the well-being of people and the care of the planet for the next 15 years (Tollefson, 2018).
Accounting paradigms
Regarding the accounting paradigms, the dimension and scope of accounting as a science go beyond the borders of financial, administrative and economic rationality in companies and in society itself, as the future of accounting thinking goes beyond estimates, recognition, measurement, presentation and disclosure of economic-financial information, so the current accounting paradigm is not only around the economic and financial benefits generated by an organization, but also in the generation of social welfare and the enactment of sustainable environments and ecosystems (Pacheco and Higuera, 2017).
The usefulness of financial information lies in the content and timing in which the financial statements are presented to the various users, information that per se gives legitimacy and credibility to the organization. Therefore, capturing the social and environmental effects concerning the entity, adds to the informative body of credibility and a true image of it (Barth & Landsman, 2018).
If the mission of accounting is to provide useful, reliable, relevant and understandable information to the general user, the relevance, probable or possible value of an environmental issue must be considered in the construction of transparency, which improves, builds advantages and integrates the interests of the different stakeholders, thereby helping to create opportunities for improvement of internal processes (Albelda, Correa & Carrasco, 2007).
Consequently, in this aspect De la Rosa (2019) affirms that any process of improvement in internal processes must consider recognizing the relevance of including environmental issues in the preparation of company information, in which, the judgment The professional accountant responsible for the preparation of financial information is essential when deciding the accounting recognition of economic events.
Definition of environmental accounting
Regarding the definition of environmental accounting, it has various nuances and a complex nature, which has managed to generate an academic discussion of interest, and which has led to questioning the application of this concept at a professional level, due to the fact that the recognition of Natural resources within the company does not have as precise a guideline as that of double entry for financial accounting, which, with the data it provides, can inform the financial performance of a company and forms a basis for decisions by part of the different users of the information (Ministry of the Environment, 2014).
To analyze the term environmental accounting, Herrera (2019) points out that it is necessary to incorporate an environmental accounting system into national economic information systems, which allows the measurement, evaluation and control of economic activities. All this in order to show the development, which has been intended to measure with the appropriation of financial and economic accounting, using social and environmental information in an isolated and disjointed way only to inform conditions according to the interests of the current policy.
Consequently, it is necessary to have a national accounting system that incorporates appropriate information on the human contexts that guarantee life with quality, dignity and social well-being, a true development. On the other hand, Jiménez, Manzano and Conesa (2015) also define environmental accounting as a system that allows the recognition, organization, assessment and registration of the conditions and changes in natural elements and the environment, articulating sustainability evaluation indicators in the development context, through information systems that facilitate the control of actions that affect the condition of nature and national development. The system of environmental accounts that is being developed internationally is an accounting paradigm,and it differs from the traditional accounting system because the value of resources is not defined by commercial transactions, but by the added value of the different benefits of the direct relationship with man (Ignat, et al., 2016).
Consequently, through the non-financial information reports, measurements and communication relationships between companies with stakeholders are presented that allow measuring the environmental performance of an organization in economic terms, and contribute to decision-making and this implies that accounting must have the ability to provide a more complete picture of the financial, social and environmental position and performance of a company.
In turn, reflecting on companies and their social responsibility, the business world has often become guilty of problems such as the extinction of species, the emission of smoke and gases that pollute the atmosphere and gradually make the ozone layer disappear, the melting of ice, acid rain, toxic waste that pollutes water, depletion and overexploitation of natural resources, etc.
However, concern for the environment is no longer a foreign issue, involving companies in environmental sustainability for which they are adopting codes of conduct in accordance with the ecological values of society, which are translated into the implementation of systems production facilities that are clean and respectful of the environment, while making an effort to communicate abroad the environmental measures adopted and the achievements achieved (Abeysekera, 2013).
In other words, companies have their own objectives and, to fulfill them, they make a series of decisions which have various consequences, since they carry out their activities in a social and environmental environment where many sectors of this environment are affected, such as the environment., the community, workers, the State, etc., so that social responsibility plays an important role that, according to Robbins (2002), goes beyond what is required by law or the economy, in which social responsibility companies highlight good practices and the responsibility they have for the impact of their decisions, actions and omissions.
Disclosure of social information
Another relevant aspect to consider is regarding the dissemination of social information, an aspect in which companies seek to communicate the success or challenges of their socio-environmental strategies, as well as the ethical coherence of their operations. The recognition of a responsibility beyond the exclusively economic limits typical of classical theory, introduces us to a scenario where, in addition to the shareholders of the firm, other agents with interests in the entity meet before whom it will try to legitimize itself.
The entity's legitimation process takes into account the existence of reference social groups to which the information communicated by the company in relation to its actions is preferably directed. The integrated information or integrated report is one of the most recent innovations within the current related to sustainability reports and non-financial information in the world. Although some companies began IR practices in the 2000s, integrated reporting has been recognized only since 2010 as the best way to get a complete picture of business value, overcoming the limitations of traditional reporting (Jensen and Berg, 2012).
In summary, the evolution in the disclosure of non-financial information is a product of the current times that challenge public accountability that demonstrates the following of certain standards and the consideration of the concerns of the interest groups, beyond the needs of investors and creditors. As a consequence, the increase in the demands and the evolution in the literature and the standardization processes on non-financial aspects, have forced companies around the world to adopt new practices and new communication channels that allow the different audiences interested in the information are first-hand observers of their activities and their impact on the environment.
In response to this new context, it has become essential for corporate reporting to evolve, while business processes are reviewed and updated without losing sight of their economic, social and environmental impacts. The IR today constitutes an alternative through which it is intended to ensure that the different interest groups are aware of the most important matters related to business that establish financial, economic and social needs at the heart of organizational processes and strategies (Rivera, Zorio & García-Benau, 2016).
With this we can see how environmental accounting is a great area of opportunity for companies, especially in Mexico, because over the years the issue of sustainability becomes more important, and sooner or later companies will have to start making decisions. in order to generate benefits for sustainable development, thus achieving the SDGs.
References
- Abeysekera, I. (2013). A template for integrated reporting. Journal of Intellectual Capital, 14 (2), 227-245. Albelda Pérez, E., Correa Ruiz, C., & Carrasco Fenech, F. (2007). Environmental management systems as an embedding mechanism: a research note. Accounting, Auditing & Accountability Journal, 20 (3), 403-422. Barth, ME, & Landsman, WR (2018). Using Fair Value Earnings to Assess Firm Value. Accounting Horizons, 32 (4), 49-58. Cardona, HAM, & Velásquez, S. (2017). Advances in social and environmental accounting in its original context. Accounting University of Antioquia, (70), 13-41. Casson, AA (2018). What is social and environmental accounting? Activos Magazine, 16 (30), 127-152.Chen, X., Lupi, F., Vina, A., He, G., & Liu, J. (2010). Using cost-effective targeting to enhance the efficiency of conservation investments in payments for ecosystem services. Conservation Biology, 24 (6), 1469-1478. De la Rosa Leal, ME (2019). The consistency of environmental accounting in national accounting regulations. Accounting and Auditing, (49), 49. Herrera, NAA (2019). Environmental accounting and corporate social responsibility within the global panorama of sustainable development. ECA Sinergia, 10 (2), 105-115. Ignat, G., Timofte, A., & Alexandra, AF (2016). Green accounting VS sustainable development. Lucrări Ştiinţifice – serious Agronomie, 59 (1). Jensen, JC, & Berg, N. (2012).Determinants of traditional sustainability reporting versus integrated reporting. An institutionalist approach. Business Strategy and the Environment, 21 (5), 299-316. Jiménez, SDP, Manzano, MP, & Conesa, IM (2015). Convergence of international accounting standards between Mexico and the United States: empirical evidence. Innovar: Journal of Administrative and Social Sciences, 21-32. Leal Filho, W., Azeiteiro, U., Alves, F., Pace, P., Mifsud, M., Brandli, L. & Disterheft, A. (2018). Reinvigorating the sustainable development research agenda: the role of the sustainable development goals (SDG). International Journal of Sustainable Development & World Ecology, 25 (2), 131-142. Mejía Soto, E., Montilla Galvis, OD, Montes Salazar, CA, & Mora Roa, G. (2014).Three-dimensional theory of T3C accounting (version 2.0): developments, advances and proposed topics. Free Enterprise, 11 (2), 95-120. Ministry of the Environment (2014). National Environmental Accounting System, Initial Exploration 2008-2012. Environmental Accounting. Quito. Pacheco, G., & Higuera, V. (2017). Line 1: Accounting and Financial Research. A. Silvera (coordinator), Foundation of the lines of research GISELA group. Barranquilla, Colombia: Coruniamericana Editorial Seal. Rivera-Arrubla, YA, Zorio-Grima, A., & García-Benau, MA (2016). The concept of integrated reporting as an innovation in corporate reporting. Journal of Innovation & Knowledge, 1 (3), 144-155. Robbins, SP (2002).Management Fundamentals, 3rd Edition. México DF, México: Pearson Education Eccles and Krzus. Thomson Reuters Eikon (2019).. Retrieved on September 1, 2019 from: https://eikon.thomsonreuters.com/index.html Tollefson, J. (2018). Wealth gap curbs Rio goals. Nature News, 486 (7404), 447.
