THE INTEGRATION OF ENVIRONMENTAL COSTS INTO FINANCIAL REPORTING: A GREEN ACCOUNTING PERSPECTIVE

Authors

Ari Purwanti Universitas Gunadarma
Billy Dewantara Politeknik Negeri Sriwijaya
Claudya Nurcahaya Politeknik Negeri Sriwijaya

DOI:

Keywords:

Green Accounting, Environmental Costs, Financial Reporting, Sustainability, Corporate Accountability

Abstract

The growing urgency of climate change and environmental sustainability has highlighted the need for integrating environmental costs into corporate financial reporting. Traditional accounting systems often fail to capture the full impact of environmental activities, limiting transparency and decision-making for stakeholders. Since 2020, research has emphasized the importance of green accounting as a framework for incorporating environmental costs, liabilities, and sustainability measures into financial statements. This literature review explores how green accounting practices enhance accountability, improve corporate social responsibility, and support long-term value creation. Evidence suggests that companies adopting green accounting frameworks not only meet regulatory requirements but also gain competitive advantages by building stakeholder trust and demonstrating environmental stewardship. However, challenges such as standardization, measurement complexity, and implementation costs remain significant barriers. By synthesizing recent studies, this paper provides insights into the effectiveness and limitations of integrating environmental costs into financial reporting, offering implications for policymakers, managers, and investors in the era of sustainable finance.

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