Environmental accounting as a tool for SMEs in environmentally induced economic risk analysis

✍ Scribed by Minna-Maari Karvonen

• Publisher: John Wiley and Sons
• Year: 2000
• Weight: 137 KB
• Volume: 7
• Category: Article
• ISSN: 0968-9427
• DOI: 10.1002/(sici)1099-0925(200003)7:1<21::aid-ema117>3.0.co;2-v

✦ Synopsis

Environmentally induced economic risks can have a profound effect on company performance and competitive ability. Especially the risk absorption potential of SMEs is limited due to scarce, particularly financial, resources. Thus assessing and evaluating the nature and potentiality of risks becomes important.

Environmental risks consist of two components: an actual ecological risk and an associated economic risk, which are related and both induced by environmental issues. Environmental accounting is a tool of environmental information providing a suitable framework and holistically integrating environmental issues to firm decision-making.

This paper concentrates on the environmental information requirements of SMEs within the framework of environmental risk recognition and assessment. Empirical results reflecting conceptual formulations of environmental accounting with respect to environmental risks are derived from the SME sector. It is suggested that for SMEs it is especially useful to approach the problem of environmental risk recognition and assessment through the concepts and tools of environmental accounting.