In the present study, based on literature studies, the role of environ-mental accounting and its contribution to both the micro- and the macro-economic level is examined in the country, beginning with the criticism of traditional accounting systems, represented by several authors, especially Schaltegger, and ending with environmental accounting.
A traditional accounting system has shortcomings, as it:
• includes most environmental costs along with others costs, and thus environmental costs cannot be identified;
• hides and allocates environmental costs;
• considers environmental costs as fixed, while they may be variable;
• features insufficiency of current accounting techniques in handling environmental issues;
• inadequately contains natural resource depletion and environmental degradation;
• omits ecological liabilities;
• takes no account of depreciation of natural resources in GDP calcu-lations;
• is a faulty tool for policy makers and planners to evaluate the eco-nomic health of the nation;
• often neglects environmental damage costs measurement pro-cedures;
• does not provide information on how much the environment is harmed; and
• does not reflect environmental impacts caused directly or indirectly by a company.
Gains from environmental management accounting (EMA):
• a tool to inform managers about the environmental costs and to quantify the environmental effects of the company;
• it reflects environmental issues and these issues will obtain more consideration;
• it evaluates and controls the environmental aspects of an organisa-tion;
• a method that would pressure decision makers to put a proper val-ue on environmental inputs in GDP;
• it helps to visualise the full amount of environmental costs as well as to calculate profitability to environmental protection measures;
• a decision-making instrument for company management to priori-tise environmental tasks and investments;
• it deals with environmental aspects of corporate activities expressed in monetary units;
• it gives the motivation to search for more efficient resource usage to control pollution more effectively and to increase the competi-tive ability;
• it serves to integrate environmental aspects into essential business decision processes;
• it helps governments to achieve pollution prevention at minimal costs;
• it can increase the effectiveness of new environmental policies;
• an economically viable approach designed to encourage greater en-vironmental protection;
• it helps to reduce corporate operating costs and also to save natural resources; and
• it supports the internal management and decision making process through various techniques of cost allocation, performance meas-urement and business analysis.
An environmental management system introduced at the company lev-el is a significant prerequisite for introducing environmental accounting.
The environmental management system is based on environmental mon-itoring data and their record-keeping. Latvia, on the global scale, has no large number of environmental management systems introduced. It may be related to the fact that its environmental policies were not effectively integrated in Latvia’s economic sectors. Actually, the introduction of an vironmental management system is associated with the introduction of en-vironmental accounting. Enen-vironmental accounting plays an essential role in integrating the environmental policy in economic sectors, yet, it has to be based on amending the legislation regulating accounting.
To introduce and develop environmental accounting in Latvia, the strat-egy and principles of environmental policy have to be integrated into Lat-via’s sectorial management, municipalities, and economic sectors where so far the environmental policy was, in reality, has been poorly developed.
The reason for it was the lack of knowledge, as the integration of en-vironmental policy into the fields concerned requires professionals. There-fore, in order both to achieve this goal and to develop environmental ac-counting at a company, training has to be conducted, training materials on environmental management accounting have to be produced and dissemi-nated and training seminars have to be held.
Based on research it is concluded that more should be developed in Latvia sustainability accounting as a framework to incorporate socio – economic sustainability factors into state policy.
REFERENCES
[1]. Bennett M., Bouma J.J., Wolters T.”Environmental management accounting:
informational and institutional developments”, Keuwer Academic Publishers, 2002. . [online] [accessed on 03.08.2013.] Available at www.ebscohost.com [2]. Biernacki M.”Green accounting in the sustainability competitiveness of
compa-nies”, Acta Prosperitatis, Riga, 2012.
[3]. Bruna I. ”Integration of environmental performance in accounting of enterprises in Latvia”, New Socio-economic Challenges of Development in Europe – 2010, Riga, University of Latvia, October 7 – 9, 2010.
[4]. Disterheft A, Ferreirada Silva Caeiro, S.S., Ramos M. R. et.al ”EMS implemen-tation processes and practices in European higher education institutions–Top-down versus participatory approaches”, Journal of Cleaner Production, Vol. 31, 2012.
[5]. Environmental State Bureau [online] [accessed on 21.03.2013.] Available at www.
vpvb.gov.lv/lv/emas/register
[6]. Gluch P. ”Managerial environmental accounting in construction projects”, De-partment of Building Economics and Management Chalmers University of Tech-nology, Sweden, 2000.
[7]. Jasch C. ”The use of environmental management accounting (EMA) for identi-fying environmental costs”, Journal of cleaner production No.11, 2003. [online]
[accessed on 22.02.2013.] Available at www.ebscohost.com
[8]. Jasch C., Stasiskiene Z.”From environmental management accounting to susta-inability management accounting”, Environmental research, engineering and management No.4(34), 2005. [online] [accessed on 05.03.2013.] Available at www.ebscohost.com
[9]. Klemmensen B., Pedersen S., Dirckinck-HolmfeldK. R., Marklund A., Ryden L.
”Environmental policy legal and economic instruments” Book 1 in a series on environmental management, The Baltic University Pres, Uppsala, 2007.
[10]. Lagzdina E., Bendere R., Ozola A., Brizga J., Kaulins J. “Vides komunikācija un vides politikas integrācija” (“Environmental Communication and Integration of Environmental Policy”), Riga, 2010.
[11]. Merem, Edmund C.”Environmental Accounting of Oil and Natural Gas: A North American Case Study of Canada and the South east of the United States”, Edwin Mellen Press 2010. [online] [accessed on 15.02.2013.] Available at www.ebsco-host.com
[12]. Schaltegger S. with Muller K., Hindrichsen H. “Corporate environmental accoun-ting”, Univerity of Basel, 1996
[13]. Staniskis J.K., Stasiskiene Z. ”Environmental management accounting in Lithu-ania: exploratory study of current practises, opportunities and strategic intents”
Journal of cleaner production No.14, 2006. [online] [accessed on 22.02.2013.]
Available at www.ebscohost.com
[14]. Starkey R., Welford R. The Earthscan Reader in Business and Sustainable Deve-lopment “Business& Sustainable Developent”, London and Sterling, Va, 2005.
[15]. Todea N., Stanciu I. C., Jaldos (Udrea) A.M.”Environmental accounting – a tool used by the entity for determining environmental costs”, Annales Universita-tis Apulensis Series Oeconomica 12(1), 2010. [online] [accessed on 20.02.2013.]
Available at www.ebscohost.com [16]. Uno K. “Environmental options”, 1995
[17]. Yakhou M., Dorweiler V. P. ”Environmental accounting coverage in the accoun-ting curriculum: a survey of U.S. universities and collegues” [online] [accessed on 20.02.2013.] Available at www.ebscohost.com
[18]. Xiaomei Li ”Theory and practise of environmental management accounting experience of implementation in China”, International journal of technology management and sustainable development”, vol. 3, No. 1, Intellect Ltd. 2004.
[online] [accessed on 22.02.2013.] Available at www.ebscohost.com