• Posted on July 12, 2023
• Harshita

MN7037 Social and Environmental Accounting Assignment Sample 2023

Introduction

Reviewing the current situation, the ongoing crisis of the global environment has intensified in the current years by the negative impacts caused by mankind in its society that lead to a significant threat to the loss in the aspects of diversity. The notion of biodiversity is important as it is responsible for the proper functioning of the ecosystem all over the world and also the management of the ecosystem.

This is also crucial for the organisation life within the biodiversity. Therefore, researchers all around the world are taking steps in order to save biodiversity. In current business era, the exploration of biodiversity accounting has been acknowledged to make a constant growth in business operation. This led many researchers to research the aspects of “biodiversity accounting” in the context of the corporate world also.

 Main body

 Concepts of Social and Environmental accounting concepts

“Biodiversity accounting” is highly required to cope up with the current situation that is creating a significant loss in the notions of diversity disrupting the entire ecosystem worldwide posing serious threats to the species. Exploration on the “social accounting” it is noted that this caters to emphasise on the accountability related to the corporate field.

The aspect of “social accounting” is used in the field of business that uses organisations that majorly deals with the notions of “sustainability” (Bismark et al. 2020). The organisation of “Tradecraft and the New Economics Foundation (NEF)” is seen to have explored “social accounting“. This organization seems to deal with the engagements between natures with that of nature that tends to be involuntary in nature. These institutions tend to enhance their impact on society by better understanding with the NGOs and Commercial companies.

On the other hand, “environmental accounting” deals with the company’s economic aspect by making a proper identification of the availability of the resources within the environment for the concerned company. The concept of “environmental accounting” tends to provide assistance to the business by making a proper accounting of the amount of the resources that are required by the company and also interlinks the aspects of cost (Burritt and Christ, 2016).

“Environmental accounting” emphasises the incorporation of information related to both the notions of economy and environment of the concerned company thereby helping in the growth of the “national economy”.

Concepts of Business and Biodiversity loss

The study has exposed the fact that working within a business gets affected immensely due to the loss in the aspects of biodiversity as it creates difficulty in the availability of the resources. The loss of biodiversity involves issues like that the reduction in the quality and quantity of the available resources in the environment (Chaudhry et al. 2020).

This further tends to the increase in the cost of other factors and the resources by the organisation required for the production of the services and resources required by the company within the market. The company tends to face higher costs in the entire supply chain and that may lead to the threat to the long-term survival of the company within the market arena.

 The business that primarily relies on the species, genes and services from that of the ecosystem, seems to face critical problems in the inputs of the production process. The loss of these species tends to increase the unhealthy aspects thereby leading to the increase in the negative influences worldwide affecting the concerned business and its entire workings (Christine et al. 2019).

Therefore to balance and save the biodiversity the companies are taking up steps towards “sustainability” that will help to maintain a proper balance between the “industry-driven initiatives” and “multiple stakeholders” comprising the company.

 Critical analysis on the biodiversity issues

In conducting an intensive study on the loss of diversity, the business organisations seem to get affected both directly and indirectly. There are certain factors in the biodiversity that affects the entire business organisation by the significant reduction in the “natural capital” and thereby leads to disruption of the “key functioning” for the notions of “business operations” and “business productivity” (Diaconu, 2017).

The few factors and challenges faced by the business organisation are catered to in order to prevent the adverse effects within the society. One such concern is the “land tenure rights” which seems to be uncertain most of the order to maintain a proper balance and the rights seem to change over time. The aspects of “governance and security” also seemed to create difficulty in the workings of the business operations (Fusco and Ricci, 2019).

This also caters to the relationship between the authorities of the business organisations and that of the stakeholders associated with the concerned business. The presence of only “theoretical and empirical” demonstration of the rules and regulations may lead to the increase in the factors that tend to grow the issues related to the rates of over-exploitation and deforestation. Furthermore, this creates a threat to the disruption of the achievement of the long term goals by the business organisation.  And this also leads to “volatility in the supply chain”.

Another important aspect is the “information related to the data of the resources” within the environment. Therefore there lie no remains of the actual vision of the linkages between the “aspects of profitability” and “conservation of nature”. The distributions and the abundance aspects are increasing but the organisations need to make more interaction with the “wild nature”, “concerned commodities” and “aspects of biodiversity” (Gomez-Conde et al. 2019).

Due to the less information of data related to the biodiversity issues and the commodities concerned the business organisation gets affected. This further led to the decrease in the production of the quality and quality of the services and the products offered by the company within the market.

The “lack of simplification of the matricides in biodiversity” tends to generate negative factors that affect the performance of the business organization within the market (Ghaemmaghami et al. 2018). This further tends to create the improper idea of the objectives and the targets set forth by the company and forces the company to face difficulty in applying their respective operations and “value chains” as well.

The “lack of simplification of the matricides in biodiversity” also creates problems in the notions of proper monitoring of the entire proceedings of the business organisation.

The notions of biodiversity loss create heavy impacts on the business institutions both in the direct and indirect aspects.  Inland use, a huge amount of waste is generated due to the primary incorporation of the stem. Business gets affected if the aspects of the loss of bio diversification tend to happen simultaneously with that of the operations involved in the business.

The direct effect on the business is the gradual loss of the habitat of the concerned place catering to the involvement of the loss of species. Moreover, this affects the social, air, and water of that particular area making it difficult for the availability of resources for the business institutions (Harikumar and Susha, 2017). Another aspect seems to be the introduction of the species that are foreign to that area which may disrupt the normal habitat of that respective area.

The loss of biodiversity may affect the “local communities” thereby creating difficulty in the availability of the resources required by the business institutions in their workings (Jermsittiparsert et al. 2020). The availability of human resources therefore may tend to decrease if the gradual loss increases over time that leading to the destruction of the natural working of the ecosystem.

This also may tend to create an imbalance within the entire biosphere concerning that particular ecosystem as well as the services provided to protect the environment. The aspects of “location” may also create a hindrance for the business operations as location seems to be one of the most important aspects that need to be taken care of.

The “remote location “can pose high threat risks. There are some indirect risks that also trigger the workings of the business such as that of the actions of the other eminent business institutions. The policies and as well as the rules and regulations of the other companies may indirectly affect the “availability of the resources” within the environment and may lead to specific changes within the entire proceedings of the business (Md Abdul et al. 2017).

The aspect of “time” and “place” seems to be quite significant as this may create serious risks to the performance and productivity of the company within the market. The notion of “prediction” “management”, “control” and “identification” by the business institutions may affect the business indirectly as these are most challenging.

The presence of the “third party suppliers” is also an important aspect that impacted the business organisations in the notions of the production as well as the sourcing of the services and goods offered by the company in the market. This may also create certain significant issues with the stakeholders involved within the company.

The results from the usage and the disposal of the goods and products by the targeted customers of the company may indirectly affect the business operations within the market. This also includes the results of the aspects of the usage and the disposal of the other customers within the business.

The notions of the business operations may get affected by the differences and the significant changes in the behaviours of the members involved in the process of working of the business, such as the local people of the respective communities and the employees (Mohammad, 2019).

This may tend to change the business operations that lead to an increase in the negative impacts on the aspects of biodiversity. Instances related to this are “conversion of the unplanned settlements”, “expansion in the agricultural aspects”. The “result of in-land migration” may also cause an increase in the demands than that of the pre-existing demand rates thereby leading to the huge rates of depletion of the availability of the natural resources.

Certain “cumulative impacts” are also acknowledged that occur due to the loss in biodiversity leading to negative impacts on the business operations as a whole on a worldwide level. As per Russell et al. (2017), the expansion of the business operations by the establishment of several companies may affect biodiversity in very close proximity and a collective manner.

The business operations of the several other companies present in the respective ecosystem may create an immense effect on the natural processes of the ecosystem. This can be done when all the incorporation of the different rules and regulations set forth by several other companies are taken in a collective manner (Mousa Mohammad and Jawabreh, 2020).

The aspects of “environmental accounting” tend to enhance the positive factors that lead to the mitigating of the issues related to the loss of biodiversity. The notion of “environmental accounting” seems to make exploration of the key factors such as highlighting the collective contributions to the aspects of the wellbeing of mankind by the natural resources.

This also includes the “costs imposed” by the rate of pollution generated that leads to the decline of the resources thereby significant loss within the ecosystem. According to Senn and Giordano-Spring, (2020), “environmental accounting” acts as a tool that makes proper identification, communication and measurement of the activities of the company.

That will also cater to the “cost of conservation of the environment” that will in the immediate future help to associate both the benefits of the company and the environment as well (Shen and Chen, 2020).

 In the “environmental accounting” four kinds of forms are there, such as, “Environmental Financial Accounting (EFA)”, “Environmental Nation Accounting (ENA)”, “Environmental Management Accounting (EMA)” and finally “Environmental Cost Accounting (ECA)” (Solovida and Latan, 2017). All these forms help in the evaluation of the financial costs that will help the company make better marketing strategies that will further help the company to promote its gradual growth and development.

Physical and monetary evaluation is also explored that finally helps in better handling the entire cost of the business operations of the business institutions within the market. Moreover, this increases the efficiency of the workings within the company leading to the significant growth of the business institutions.

The implementations of these forms of “environmental accounting” lead to the generation of proper and exact reports helping the business authorities to set proper objectives and goals in the immediate future that will create growth in the factors related to the aspects of sustainability (Somjai et al. 2020).

There is the presence of certain significant theories that will help in the aspects of the loss of diversity. In this study, the two theories are to be focussed on which are “Institutional Theory of Diversity Management” and “Stakeholder theory”. In the “Institutional Theory of Diversity Management“, the focus would be given to the “cognitive diversity hypothesis” that assists the institutions in bridging the gaps between the diverse cultures among the various groups present within the business institutions (Susanto and Meiryani, 2019).

This furthermore, focuses on the innovative ways to solve the problems faced with the internal as well as external spheres of the business institutions.

“Cognitive diversity” tends to indicate the differences between the differences of the characteristics among the employees within a group such as it provides knowledge to the aspect of the experience, expertise and so on.  On the other hand, there lies the model of “Justification-Suppression Model” that focuses on the act of particular individuals and their prejudices. This theory tends the business authorities to get a better view and better understanding of the particular individual concerning the respective field.

The implementation of this theory on the business aspects tends to create an increase in the notions of manifestations of the respective individuals (Tashakor et al. 2019). The manifestations of their prejudices help them to open up themselves and their ideas in front of the company spheres and this leads to clarifying a number of miscommunications in their acts within the business institutions.

This model helps in strengthening the bonds between the business authorities and the entire group of stakeholders involved within the business.

The application of this model furthermore helps in the productivity and the performance level of the company generating positive results and also successful completion of the goals set forth by the company. Moreover, it also helps to create unity among the stakeholders and the company authorities supporting them in adverse conditions (Taygashinova and Akhmetova, 2019).

The implementation of the “Stakeholder theory” is also of prime importance as this theory emphasises mitigating the diversity issues of the various stakeholders present in the business organisations. The theory helps in bridging the gap generated due to the miscommunications as well as the other aspects involved within the business by catering to the factors that enhance the generation of satisfying the stakeholders.

This is done by better acknowledgement of the proper requirements and the needs by the stakeholders focussing on their values and interests.

 The implementation of this theory promotes the growth of the aspects that are related to sustainability issues.  The implementation of this theory tends to increase the aspect of engagement of the diverse stakeholders to work collectively with the help of better identification of stakeholders, their interests and values.  This theory tends to help the company to “lead with integrity” by the proper “management of the expectations”.

Identification of determinants, opportunities, and limitations of biodiversity accounting

In conducting the study of “biodiversity accounting”, there lies many factors that create certain determinants which are “land-use change”, “change in the climatic conditions”, “enrichment of the nutrients” that drives the changes in both the ecosystem of the company as well as the environment. The notions of these will majorly affect the performance of the business operation within an organisation lowering the quality and the quantity of the products and services offered by the company.

This is due to the decrease in the availability of the resources within the natural environment thereby leading to a sharp decrease in the supply of the raw material within the company. The other major factors that contribute to the “biodiversity accounting” are “human exponential population growth”, “increased rate of consumption“.

The above-mentioned factors also help in determining the aspects of the balance in the entire system of business operations within the business organisations.

Opportunities are also acknowledged in the aspect of business operations such as it enhances the accounting skills related to the field of finance of the business institutions. The aspect of “biodiversity accounting” helps in the proper keeping of the records, the valuation of the entire business operations.

This also assists in improving the concerns related to the legalities of the policies that are incorporated by the government for both the environment leading to promote progression in balancing the ecosystem. Certain limitations are also acknowledged and evidenced from the instances that lead to the decline in biodiversity such as, the “change in the habitat”, “the notion of over-exploitation”, “pollution”, “species that are invasive in nature“.

These above-mentioned notions tend to drive the entire ecosystem and thereby affect the business operations within the company (Zhang, 2018).

Conclusion

Biodiversity is quite an important aspect in maintaining a proper balance within the ecosystem that promotes significant growth of both the business institutions as well as the environment. The aspect of biodiversity seems to be a crucial issue in catering to the vast diversification of the species present in the environment together with the maintenance of the “assets of the ecosystem”.

In this extensive study, the concepts of “Social and Environmental accounting” are discussed in order to maintain a proper balance within the ecosystem thereby helping the business to associate with the positive aspects leading to the growth of the business. The finance of several business operations is elevated with the proper acknowledgement of the better usage of the availability of the resources.

This is because the notions of “Social and Environmental accounting” help with proper management of the social as well the environmental aspects. The commercial benefits will also be achieved by the company by the implementation of the theories of “Stakeholders theory” and “Institutional theory of diversity management“. These theories will help the company to maintain a better relationship between the stakeholders and the business authorities.

References

Bismark, K.A., Zhang, D., Majumder, S.C. and Malepekola, P.M., 2020. Effects of Environmental Strategy, Uncertainty and Top Management Commitment on the Environmental Performance: Role of Environmental Management Accounting and Environmental Management Control System. International Journal of Energy Economics and Policy, 10(1), pp. 360-370.

Burritt, R. and Christ, K., 2016. Industry 4.0 and environmental accounting: a new revolution? Asian Journal of Sustainability and Social Responsibility, 1(1), pp. 23-38.

Chaudhry, N.I., Asad, H., Amir, C.M. and Hussian, R.I., 2020. Environmental Innovation and Financial Performance: Mediating Role of Environmental Management Accounting and Firm’s Environmental Strategy. Pakistan Journal of Commerce and Social Sciences, 14(3), pp. 815-837.

Christine, D., Yadiati, W., Afiah, N.N. and Fitrijanti, T., 2019. The Relationship of Environmental Management Accounting, Environmental Strategy and Managerial Commitment with Environmental Performance and Economic Performance. International Journal of Energy Economics and Policy, 9(5), pp. 458-464.

Diaconu, P., 2017. From the accounting of war to the accounting of peace: putting bricks for a new environmental accounting. A critical analysis. Accounting and Management Information Systems, 16(1), pp. 107-131.

Fusco, F. and Ricci, P., 2019. What is the stock of the situation? A bibliometric analysis on social and environmental accounting research in public sector. The International Journal of Public Sector Management, 32(1), pp. 21-41.

Ghaemmaghami, K., Zamani, M. and Shafiei, H., 2018. Investigating Environmental Accounting and its Role in Reducing Environmental Costs (Case Study: Iran Noubaft Textile Company). Journal of Accounting, Finance and Auditing Studies, 4(4), pp. 185-202.

Gomez-Conde, J., Rogerio, J.L. and Fabricia, S.R., 2019. Environmental innovation practices and operational performance: The joint effects of management accounting and control systems and environmental training. Accounting, Auditing & Accountability Journal, 32(5), pp. 1325-1357.

Harikumar, P.N. and Susha, D., 2017. Environmental Accounting in the Indian Corporate Sector: A Quarterly Peer Reviewed Multi-Disciplinary International Journal. Splint International Journal of Professionals, 4(6), pp. 50-55.

Jermsittiparsert, K., Somjai, S. and Toopgajank, S., 2020. Factors Affecting Firm’s Energy Efficiency and Environmental Performance: The Role of Environmental Management Accounting, Green Innovation and Environmental Proactivity. International Journal of Energy Economics and Policy, 10(3), pp. 325-331.

Md Abdul, K.M., Bae, S.M. and Jong, D.K., 2017. Analysis of Environmental Accounting and Reporting Practices of Listed Banking Companies in Bangladesh†. Sustainability, 9(10), pp. 1717.

Mohammad, M.R., 2019. Economic analysis of using green accounting and environmental accounting to identify environmental costs and sustainability indicators. International Journal of Ethics and Systems, 35(4), pp. 504-512.

Mousa Mohammad, A.S. and Jawabreh, O.A.A., 2020. Role of Environmental Awareness in the Application of Environmental Accounting Disclosure in Tourism and Hotel Companies and its Impact on Investor’s Decisions in Amman Stock Exchange. International Journal of Energy Economics and Policy, 10(2), pp. 417-426.

Russell, S., Milne, M.J. and Dey, C., 2017. Accounts of nature and the nature of accounts: Critical reflections on environmental accounting and propositions for ecologically informed accounting. Accounting, Auditing & Accountability Journal, 30(7), pp. 1426-1458.

Senn, J. and Giordano-Spring, S., 2020. The limits of environmental accounting disclosure: enforcement of regulations, standards and interpretative strategies. Accounting, Auditing & Accountability Journal, 33(6), pp. 1367-1393.

Shen, J. and Chen, Y., 2020. A Comparative Study of Environmental Accounting Information Disclosure between China and Developed Countries. IOP Conference Series.Earth and Environmental Science, 508(1),.

Solovida, G.T. and Latan, H., 2017. Linking environmental strategy to environmental performance: Mediation role of environmental management accounting. Sustainability Accounting, Management and Policy Journal, 8(5), pp. 595-619.

Somjai, S., Fongtanakit, R. and Laosillapacharoen, K., 2020. Impact of Environmental Commitment, Environmental Management Accounting and Green Innovation on Firm Performance: An Empirical Investigation. International Journal of Energy Economics and Policy, 10(3), pp. 204-210.

Susanto, A. and Meiryani, M., 2019. The impact of Environmental Accounting Information System Alignment on Firm Performance and Environmental Performance: A case of Small and Medium Enterprises s of Indonesia. International Journal of Energy Economics and Policy, 9(2), pp. 229-236.

Tashakor, S., Appuhami, R. and Munir, R., 2019. Environmental management accounting practices in Australian cotton farming: The use of the theory of planned behaviour. Accounting, Auditing & Accountability Journal, 32(4), pp. 1175-1202.

Taygashinova, K. and Akhmetova, A., 2019. Accounting for environmental costs as an instrument of environmental controlling in the company. Management of Environmental Quality, 30(1), pp. 87-97.

Zhang, L., 2018. Research on Enterprise Environmental Accounting Information Disclosure from the Perspective of Environmental Protection—Taking Sinopec as an Example. IOP Conference Series.Materials Science and Engineering, 452(3),.

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