Theory and Implementation Green Accounting
Ardin Dolok Saribu, Nonni Sise Riani Manihuruk, Ayang Pratama (Doctoral's Students, Universitas Sumatera Utara)
Background
Growing world of industry, it is undeniable effects on the environment issues where
industry behavior often ignore the impact on the environment, such as the incidence of water
pollution, t anah, air and social disparities on the environment. From these two emerging
awareness that led to various efforts from various fields to menangulangi and find solutions
to these environmental problems, and one of them is from the side that emerges green
accounting accounting. In developed countries where the demands of society is very high,
green accounting is growing rapidly evidenced by the many regulations related to this
environment. Our country in Indonesia where the level of pollution and waste management is
still not very good impact on the Indonesian economy.
In the era of corporate movement towards the green company, the industry is not only
prosecuted for limited processing of waste, but the demands of the consumer-society
furthermore that the production process of goods ranging from raw material up to the disposal
of a product after consumed (used) (Idris, nd). In an effort to conserve the environment,
accounting plays a role through voluntary disclosure in its financial statements related to
environmental costs or environmental costs. The accounting system in which there are
accounts associated with these environmental costs is referred to as green accounting or
environmental accounting (Aniela, 2012). Internally, the role of green accounting can provide
a motivation for managers to reduce the environmental costs incurred, which will affect the
decisions that will be the basis of the company's existence in the men coming
(Sahasrakirana).
Green Accounting
According to Prof. Andreas Lako, Professor of Accounting for Sustainability Unika
Soegijapranata, Green Accounting is a new Paradigm in Accounting which advocates that the
produce Financial Statements for can be known Profit / Loss (profit) Corporate Entity, but
also on the transactions / events (social) (people) and the environment (the planet) so that also
known Social and Environmental Accounting Information. Green Accounting requires
Accounting that not only focuses on Profit but also on People and the Planet.
Green accounting came about because of the world's concern for the environment that
is continuously damaged, one of which is due to the Corporations. According to data cited
from WALHI Indonesia, Corporations are responsible for most of the Environmental
kerusakaan in Indonesia. The corporation is responsible for 31.4% of the Natural Damage in
Indonesia. Maybe you remember the event of Burning Forest in 2015 ago. Forest Burning
which lasted several months and not only disrupt Indonesia but also neighboring countries
like Singapore, Malaysia, and Brunei Darussalam, the World Bank said that Forest Burning
in Indonesia as the biggest Criminal Environmental Action in the 21st Century.
Then, what is the relationship of Green Accounting with the Forest Fire? As
Accountants, we deserve to be skeptical about it, and our suspicions are not without reason,
according to Herry Purnomo, Researcher of the Center for International Forestry Research
(CIFOR), Forest Burning is based on Profit Motive Corporation, Corporations gain double
advantage, fertile and cheaper Land Opening Charge. Indirectly, the Corporation ignores its
Environmental Aspects, therefore, Green Accounting BornThis time, the Company considers
that the use of aspects of the Environment in its Policy only adds cost alone. However, with
the existence of Green Accounting, the cost can be recognized as an Asset in the form of
Investment of Environmental Social Responsibility.
Therefore, the Company's Profits will not be eroded by the cost of conducting
business operations that are environmentally friendly. Instead, the Company's asset increases,
CSR costs can also be treated similarly, so the CSR of the company is expected to increase
with the Use of Green Accounting. Environmental costs can be considered to provide
economic benefits for the Company in the future, Providing Sustainable CSR also other costs
of the Company in the long term will improve the image and name of Good for the Company,
which in turn will bring positive economic benefits for the company. In addition, One Asset
Criteria said that Economic benefits should be measured with certainty, Then?. Are these
benefits can be measured? It is often a debate here, but that is the Accountant's Duties in the
era of IFRS, Accountants are required to have a good Judgment ability to measure the value
contrary to the Conservative Accounting Concepts in some respects. However, given the
many positive impacts of Green Accounting. I think it is quite feasible that Green Accounting
Standards should be Developed.
History and Development of Green Accounting
In Europe this concept of green accounting has begun to develop since the 1970s,
starting with Norway affected by the publication of Limits to Growth (Meadows et al. 1972)
and the growing environmental movement. Then the ministry of the environment Norway
develop statistics for the measurement of natural resources as a tool 4 to better manage
natural resources. Where there is fear that their resources will be depleted due to
overexploitation. Then this environmental issue also received the attention of the Danish
government as a result of the oil crisis of 1977 which began to make calculations of energy
reserves and savings. In the 1980s, France develop an accounting system for assessing both
quantitative and qualitative situation and changes over their natural resources (Vanoli 2005:
344). From the Netherlands Roefie Hueting, who develops and seeks to apply a measure of
sustainable national income that takes into account changes and decreases in environmental
assets caused by economic activity. If we look at efforts made at this early stage in some
countries have in common where only focused on obtaining a picture of physical data from
the use of natural resources.
In the era of the 1990s the International Accounting Standards Committee (IASC)
pengembangkan concept of international accounting principles which include the
development of environmental accounting. And as industry standards increase as professional
auditors grow, the American Institute of Certified Public Accounts (AICPA) issues universal
principles on environmental auditing. The United Nations through the Coalition for
Environmental Economies (CERES) and UNEP in 1997, issued the Global Reporting
Initiative (GRI), which is a corporate reporting guide to support sustainable development.
GRI which until now has been experiencing a renewal, the main content can be divided into
six sections include: economic, environmental, human rights, labor practices and decent
work, product responsibility, and community. Then in 2000 the Japanese Ministry of the
Environment issued environmental accounting guidelines which were refined in 2002 and
Green Accounting Implementation in Indonesia
Environmental accounting has difficulty in measuring the value of cost and benefit
externalities arising from industrial processes. It is not easy to measure the losses that people
receive around and the ecological environment caused by air pollution, liquid waste,
ammonia tube leaks, nuclear tube leaks or other externalities. Reporting on both social
performance and environmental performance is not found in the conventional financial
statements, which in the conventional financial statements are only found only economic
performance reports (Idris, 2012). Similarly, what is happening in Indonesia is still perceived
as a complicated concept because of the lack of comprehensive information for stakeholders
it is feared that it will have the effect of implementation and additional expenses recognized
as a burden that should not be spent in the conventional accounting perspective (Nurhayati,
Brown, and Tower, 2006 in Arisandi and Frisko, 2011).
This is consistent with that disclosed by Gray et. al (1993) in Burrit and Welch (1997)
that the disclosure of the costs of externalities will affect decision-making and influence
stakeholder consideration because the market reaction has shown different results on the
activities of companies that do (or not) the social and environmental interests. So that the
implementation of environmental accountability will be successful if it is supported by
legislation. According to Solihin (2008) in Idris (2012), the implementation of CSR in
Indonesia is mainly related to the implementation of CSR for the category of discretionary
responsibilities, which can be seen from two different perspectives. First, the implementation
of CSR is a voluntary business practice of a corporate initiative and is not an activity required
by a company in accordance with applicable laws and regulations. Second, the
implementation of CSR in accordance with the demands of the law (mandatory). For
example, SOEs have an obligation to set aside a portion of the profits earned by companies to
support social activities, and companies that run business activities in natural resources or
related to natural resources, are obliged to implement CSR as regulated by RI Law no. 40
Year 2007 on Limited Liability Article 74.
Seen from the basic point of the implementation law, CSR in Indonesia is
conceptually still to be disaggregated between the implementation of CSR conducted by large
negative impact on society and the environment, even though small and medium enterprises
can have a negative impact on society and the surrounding environment. Especially when it's
small and medium enterprises in number, of the impact will be accumulated in large numbers
and to overcome them will be more difficult than the impact caused by the large enterprises.
When viewed from the implementation of CSR in Indonesia, it can be said that
companies that have implemented the CSR program and make the report can not be said as a
company that has applied environmental accounting. This is because in the operation of the
company has not included environmental conservation efforts as an integral part (Idris, 2012).
Gray et al. (1993) concluded that voluntary disclosure mechanisms were less precise.
Evidence from Deegan and Rankin (1996) mentions that environmental accounting reporting
is biased because companies often do not report bad news (bad news).
Conclusion
The impact of company activity should be reported as the realization of corporate
responsibility to stakeholders. The low awareness of environmental impact reporting is
caused by several reporting constraints. The importance of environmental accounting should
be undertaken to improve its application. Here are some efforts to improve environmental
accounting reporting:
1) Prepare environmental accounting standards. In an effort to uniformity and fulfill
comparative function, the Indonesian Institute of Accountants (IAI) is expected to
develop Sustainability Reporting guidelines.
2) Require to apply existing reporting guidelines. Since the overall activities of the
company will have an impact on society and the environment in the long term to
maintain sustainable development, Sustainability Reporting on Sustainability
Reporting is mandatory.
3) To reward companies that have organized Sustainability Reporting. The holding of the
Indonesia Sustainability Reporting Award (ISRA) by the Indonesian Institute of
Accountants The Management Accountant Compartment is expected to enhance the
company's reputation and then its awareness
5) Conduct an environmental audit. Sustainability reporting should be accompanied by
an environmental audit to improve the credibility of reporting.
6) Developing Good Corporate Governance (GCG) mechanisms to ensure the
application of environmental obligations. Through the establishment of the CSR
committee in governance components, the expected implementation of green
accounting and sustainability reporting will be more reliable and increased.
REFERENCE:
Yoshi Aniela. 2012.
PERAN AKUNTANSI LINGKUNGAN DALAM MENINGKATKANKINERJA LINGKUNGAN DAN KINERJA KEUANGAN PERUSAHAAN
