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Universal Journal of Accounting and Finance 9(4): 722-734, 2021 http://www.hrpub.org
DOI: 10.13189/ujaf.2021.090418
Making Environmental Accounting Work: Case of the
Zimbabwe Mining Industry
1,* 2 2 2
Otekunrin Adegbola Olubukola , Samu Tafadzwa , Sifile Obert , Matowanyika Kudzanai
1Department of Accounting and Finance, Landmark University, Nigeria
2Graduate School of Business, Chinhoyi University of Technology, Chinhoyi, Zimbabwe
Received December 15, 2020; Revised February 7, 2021; Accepted March 1, 2021
Cite This Paper in the following Citation Styles
(a):[1] Otekunrin Adegbola Olubukola, Samu Tafadzwa, Sifile Obert, Matowanyika Kudzanai , "Making Environmental
Accounting Work: Case of the Zimbabwe Mining Industry," Universal Journal of Accounting and Finance, Vol.9, No.4,
pp.722-734 ,2021. DOI:10.13189/ujaf.2021.090418.
(b): Otekunrin Adegbola Olubukola, Samu Tafadzwa, Sifile Obert, Matowanyika Kudzanai (2021). Making
Environmental Accounting Work: Case of the Zimbabwe Mining Industry, Universal Journal of Accounting and Finance,
9(4), 722-734. DOI:10.13189/ujaf.2021.090418.
Copyright©2021 by authors, all rights reserved. Authors agree that this article remains permanently open access under
the terms of the Creative Commons Attribution License4.0 International License
Abstract The research sought to find out how environmental accounting guidelines. The research
environmental accounting can work in Zimbabwean recommended that government organisations monitor and
Mining Companies. Descriptive research design was used control mining activities independent of politics and
and mixture of qualitative and quantitative data was commit both human and financial resources towards
collected using questionnaires and interviews. Stratified researching on how best environmental accounting can be
purposeful sampling of 52 respondents was made up of 16 implemented.
Mining Companies' executives which are dominant Keywords Environmental Accounting, Sustainable
companies in mining gold, nickel, asbestos, coal, copper Strategy, Mining Industry
and chromite, 20 government organisations representatives
and 16 mining communities’ heads (8 Chiefs and 8
Headmen) were done. Community heads were interviewed
and questionnaires were sent to Mining Companies'
executives and government organisations representatives 1. Introduction
who were also interviewed two months after. The research The earth has been faced with dire consequences of
reveals that government is not doing enough in fostering businesses turning a blind eye on nature as they pursue
the implementation of environmental accounting in economic benefits. Ainapur and Rao [1] assert that
Zimbabwe. There is no commitment of enough resources businesses operate in an environment and their economic
by the government towards adoption of environmental success hinges on what the environment has. Possessions
accounting. The mining sector has been politicized, of the environment are at the mercy of these businesses as
making it difficult to enforce environmental laws in this they keep posing a danger to the existence of flora and
sector whilst on the other hand there are no effective laws fauna [61], [77]. Unsustainable business operations have
and policies that regulate environmental accounting issues. resulted in the world’s most devastating calamities as well
The core existences of economic instability and political as human rights infringements [31], [61]. Williams [100]
upheavals in the nation have forced firms to concentrate on says that all creatures need to enjoy what the universe
their continued economic existence, doing almost nothing
on environmental accounting. It was also noted that there is offers, not only the human being. U.S Green house Gas
m Inventory Report [105] and U.N. Food and Agriculture
no proper monitoring and controlling of ining activities
by law enforcers, leaving the natural environment Organisation [94] have blamed industrial activities for
subjected to unsustainable mining activities. There are no major environmental pollutions which will continue to
Universal Journal of Accounting and Finance 9(4): 722-734, 2021 723
rise unless governments intervene. This has contributed 1.1. Research Objectives
immensely to ecosystem and climate changes [99], [90], (1) To establish factors that hinders the mining
[12]. Zimbabwe has no comprehensive data on levels of companies from embarking on environmental
pollution but the pollution level is worrisome. Businesses accounting.
need to consider the costs of their environmental damages (2) To identify if making environmental accounting work
and fully incorporate them in their profits computations as can be a strategic sustainable resource management
well as their decision making. There is ample evidence tool in the mining sector in Zimbabwe.
that fighting nature is fighting you [14], [24]. This is (3) To determine the role of government in fostering
explained by devastating calamities that have befallen environmental accounting in the mining sector.
human being. In 2018, Zimbabwe was hit by serious (4) To ascertain the implications to the mining sector of
floods that killed and injured an unconfirmed number of adopting environmental accounting.
people and livestock leaving tens of thousands of people
homeless. Global temperature has been increasing making
life uncomfortable for earth’s inhabitants [77], [7]. There 2. Literature Review
has been a tremendous prise of societies, government
sanctioned and non-government sanctioned organisations 2.1. Theoretical Literature
against firms that are a danger to the environment and the
societies they operate in [65], [73]. Environmental 2.1.1. The Green Political Theory
accounting has become a pertinent growing source of The theory emerged in recognition of the global
concern to businesses globally as the world seeks to attain environmental crisis where perpetual destruction of nature
sustainable development environmentally [68], [56], [69], has become problematic [40]. Green Theory is embroiled
[101], [107]. with a health warning in which nature is considered to be
Firms need to admit having more responsibilities a crucial entity in its own right. The theory is engrained
besides solely meeting shareholders’ expectations [15], with the idea that the planet earth was not created for
[32], [81]. Malaysia, United Kingdom, Canada, South humans alone, but all life. The theory is centered on
Africa among others nations have been heavily punishing idealising the co-existence of humans and non-humans
companies for activities that cause environmental damage and their relationship [76]. The green political theory
as well as pushing for environmental accounting audits. advocates for an eco-centric approach and abandonment
Environmental accounting has either been voluntary or of the anthropocentric world view in which more value is
mandatory. Mandatory environmental accounting has placed on the survival of humans instead of the whole
been accepted and supported by most organisations in ecosystem [97]. The green political theory has
America, Australia, Asia and Europe [91], [55]. In Africa environmental ethics at it realm. Its ethical stance stems
a few countries such as South Africa, Kenya, Namibia and from the philosophies developed by Gandhi and Spinoza
Botswana have mandated environmental accounting as who advocated for everyone to do things with a foresight
requirement for companies to be listed on the stock and care for other things that exist now and their
exchange [48]. generations to come. On this basis, moral choice should
Some developed nations have introduced green tax [19] then be the source of every decision [88]. The ideology
which is a tax levied on products or services that harm the behind this theory is based on creation of a world that is
environment. This is meant to discourage use or ecologically sustainable (a world that is rooted in social
consumption of goods / products and services that are not justice, environmentalism and non-violence) [73]. Human
environmentally friendly [4]. The ecosystem accounts beings are a minor component on earth hence questioning
contain maps, accounting tables and monetary value of the the idea that humans are more superior to anything that is
Ecosystem Capital [95]. The ecosystem accounting constituted in nature. The theory seeks to address
approach is grounded in the System of socio-ecological problems hence strengthening the
Environmental-Economic Accounting (SEEA) which was capacity to attain sustainability globally. The green
developed by the U.N Committee on Environmental political principles drive for sustainable environmental
Economic Accounting. In Zimbabwe, companies still management which saves nature.
primarily focus on profit motives [102] escalating 2.1.2. The Stakeholder Theory
degradation of the environment [9], [92], [62]. The
Zimbabwean Mining Sector has to account for The popular word ‘‘Stakeholder’’ first appeared in
environmental costs. Contrast to other legislations, the 1963 through the Stanford Institute of research [16]
Zimbabwean laws is silent on this. Moreover there are no countering the ideology that the stockholders are the only
sound sustainable strategies that give room for the group that management should focus on when making
initiation of environmental accounting as far as the decisions [38]. Edward Freeman, the pioneer of
Zimbabwe Mining Sector is concerned. Stakeholder Theory describes stakeholders as internal and
724 Making Environmental Accounting Work: Case of the Zimbabwe Mining Industry
external groups of people that have and can be influenced environmental issues [86], [96], [35], [71].
by the activities of the businesses. The theory seeks to Lack of adequate resources and dedication towards
devise ways in which organisations can reap maximum implementation of environmental accounting has been
benefits by being responsive to all stakeholders. The encountered by many nations [103]. George, Siti-Nabiha,
fundamentals of the theory insinuate that there should be Jalaludin & Abdalla [39] articulate that insufficient funds,
existence of relationships between organisations and their absents of appropriate human capital, unavailability of
various stakeholders, and there should be equality expertise and knowledge are the major problems in
between different stakeholders [60], [75]. The stakeholder implementing environmental accounting practices.
concept requires businesses to consider the welfare of Environmental accounting is considered to be at its infant
societies, nature and be ethical. The theory is a driving stage in most countries hence there is limited expertise in
force for firms to be more concerned and conscientious in this area and this proves to be problematic when it comes
every function they undertake taking into consideration to its implementation especially in developing nations
the effects of their activities on its stakeholders and the [17], [72]. In some cases, lucrative business projects out
natural environment hence achieving social and compete sustainable projects especially in developing
environmental accounting [22]. Businesses that apply the nations, making finance the greatest challenge in adopting
stakeholder theory are perceived to be more environmental accounting in such scenarios [54].
environmentally considerate and they strive to embark on Non-alignment of thoughts and goals between financial
activities which do not harm the environment [75]. teams and environmental advocates is a significant barrier
to implementation of environmental accounting. There is a
2.1.3. Institutional Theory divergence of priorities in most cases between
The theory suggests that organisations conform to sustainability teams and financial team members within
well-known rules as well as norms of governing organisations. The financial management team is seen to
institutions to get support and be perceived as legitimate be more influential and possess the power to key decision
[83]. The theory explains show changes in societal values, making, hence sustainability teams tend to have little or
technological improvement, as well as regulations can no influence as decision makers hence making
influence decisions about environmental accounting [3]. environmental accounting of little or no effect. This leads
In this case organisations exist in an institutional to environmental issues not being fully incorporated into
environment and these institutions create expectations that the business strategy [5], [80]. Environmental issues are
enhance legitimacy practices for firms and they have not easily measured and quantified. Without the existence
powers to influence individual company’s activities [93]. of an apparent means to price environmental costs such as
These institutions have the power to stop or shape pollution and climate change it is difficult to include these
organisational behaviours, decisions and goals [64], [53], issues as part of accounting and decision making. This
[74]. The institutional environment pushes the companies then implies that even when firms try to implement
into focusing on the implementation of environmental environmental accounting, they may not be fully aware of
accounting practices that can meet the expectations of the actual costs and problems associated with their
these institutional organisations. Institutional theory activities in the long run [51].
clearly show firm’s actions or behaviour can be governed 2.2.2. Strategies of Implementing Environmental
by its institutional environment [23]. Accounting
The ecosystem accounts contain maps, accounting
2.2. Empirical Review tables and monetary value of the Ecosystem Capital [95]
2.2.1. Factors Hindering the Implementation of The ecosystem accounting approach is grounded in the
Environmental Accounting System of Environmental-Economic Accounting (SEEA)
which was developed by the U.N Committee on
Impediments to environmental accounting practices can Environmental Economic Accounting (UN System of
be country specific, continent specific, firms specific or Environmental Economic Accounting (SEEA) [95]. The
industry’s specific [103]. One of the factors that hinder the ecosystem accounts produced in Netherlands presented a
implementation of environmental accounting process is comprehensive over view of ecosystem capital which
that it is a complicated accounting procedure [59]. The included services provided by the ecosystem and the
rise of many initiatives towards environmental accounting interdependencies of the economic activities to these
by many different international bodies has led to no ecosystems. This has allowed the measurement in change
shared consensus among practitioners hence lacking of the ecosystem capital and has assisted the nation in
comparability [35], [79], [18]. It has been difficult for environmental management [26]. The introduction of
firms to decide on which framework to adopt; currently Green Tax in the United States, which is levied on
there is unavailability of a single framework that guides products or services that harm the environment, has been
environmental accounting and reporting process. There is very successful such that more than 10% of the revenue
no agreed basis of evaluating the quality and reliability of generated by the federal government is from Green Tax.
Universal Journal of Accounting and Finance 9(4): 722-734, 2021 725
This has pushed companies to be environmentally friendly businesses in addressing challenges they faced as they try
[30], [46]. to implement Environmental Accounting. The provision
2.2.3. The Role of Governments in Implementing of state-issued information and guidance aided business to
Environmental Accounting be aware of predominant Environmental Accounting
issues and provided the basis for strategy formulation in
Governments are gradually getting involved in fostering tackling the problems faced by firms in implementing
the adoption of environmental accounting especially in environmental accounting.
Asia, America and Europe, where protection and Where environmental accounting has been
promotion of social objectives are considered to be very implemented, the governments in such nations have to a
crucial [98]. In UK, environmental accounting has gained larger extend been involved in environmental accounting
prominence such that it has become government’s priority standard setting through the provision of policy
on public agendas [6]. In particular the governments have framework, which pushes organisations beyond minimum
an important role in developing legislations and legal standards [78]. Government plays a crucial role in
regulations that controls the implementation and adoption policy-making which is crucial in promoting
as well as continued monitoring of environmental environmental accounting at national level, encouraging
accounting practices [25].The success of environmental tightening of laws that enhance environmental accounting.
accounting is in the government’s ability in providing a Canada has enacted numerous policies that seek to
framework for regulations and its ability to enhance the promote environmental accounting implementation. Since
means by which to monitor compliance by firms. the inception of the Canadian Environmental Protection
Governments have an important role in environmental Act in 1999 several policies have been introduced and
accounting standard setting through the provision of several amendments have been made to the act and more
policy framework and making sure international financial additions have been engrossed in the act so as to address
reporting standard is complied with [106]. Canadian and current environmental issues [87].
Philippians governments have been very successful in Integrating and collaborating with other international
doing that [49]. South Africa has also come up with organisation that are pushing for environmental protection
similar legislations which seek to support the King lll such as the United nation is one of the ways in which
code of governance which also advocate for developed nations have managed to make environmental
environmental and social accounting [50]. Governments accounting work in their nations. This has been made
are also in a better position in pushing for SEEA possible by entering into agreements and treaties. Canada
principles and countries such as Botswana, Namibia and and Norway have entered in several of such agreements
Australia are leading in pushing for the adoption of SEEA with various organisations such as the Organisation for
in Environmental accounting practices. More so the Economic and Cooperation and Development (OECD)
government stands a better place in raising awareness and and the North American Commission for Environmental
builds the pillars for environmental accounting Cooperation. The government of China, Us and Germany
implementation by organisation as they do have their have been the leaders in promoting environmental
sources and influence. Germany started to consider the accounting through the introduction of clean technology.
adoption of environmental accounts in the1980s and very In United States, the federal government has invested
successful results were yielded [57]. The more people are more than $1.8 billion in clean technology and more
aware of environmental problems caused by unsustainable money resources are expected to be channelled into the
business operations, the more likely that attention will be adoption of clean technology [78]. Helping business in
diverted towards identifying solutions to address these adopting clean technology is also another way in which
environmental challenges. This implies that people have government scan foster for environmental accounting.
to be made aware of the negative implications of being 2.2.4. Implications of Adopting Environmental Accounting
reckless to the environment. This can be broadcasted on 2.2.4.1. Benefits of Environmental Accounting
radio and television stations.
Some governments in Europe have also been acting as Environmental accounting accrues an extensive
providers of information to firms that desire to implement spectrum of benefits to the business organisation that
Environmental Accounting, Netherlands being the best in implements it [10], [37]. One of the benefits
doing so [8]. The Dutch government when the environmental accounting is that it will reduce pressure
implementation of Environmental Accounting was still at from stakeholders. It is evident that businesses are facing
its initial stage, sourced information from other nations continued increase in pressure from stakeholders over
which were already practicing Environmental Accounting their need to recognise the damage they are causing to the
and made it available to local firms through initiatives that environment. Environmental accounting helps companies
included websites, radio and television channels that avoid such pressures and encourage firms to innovate and
informed the society on how to adopt Environmental come up with ways of reducing environmental harm and
Accounting. The Netherlands Government aided strategies to enhance sustainable resource management
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