Implementing Sustainable Finance and Green Accounting Practices: Benefits and Challenges
DOI:
https://doi.org/10.62207/3fb3m265Keywords:
Sustainable Finance; Green Accounting Practices; Company performance; Literature Review; Implementation ChallengesAbstract
This research investigates the implementation of sustainable financial practices and green accounting practices and their impact on company performance. A comprehensive literature review was conducted by collecting and analyzing related articles from various sources. The results reveal that sustainable financial practices and green accounting practices play an important role in improving corporate environmental and financial performance. However, there are several challenges faced in implementing this practice, including limited data, regulatory barriers, and lack of stakeholder awareness. Future studies are recommended to develop a more structured framework, conduct further empirical research, and expand regional understanding of the impact of sustainable financial practices and green accounting practices.
References
Abdalla, Y. and Khalid, S. (2015). Pressures for sustainability practices in an oil and gas company: evidence from sudan. Qualitative Research in Accounting & Management, 12(3), 256-286. https://doi.org/10.1108/qram-04-2014-0038
Agyekum, K., Opoku, A., Oppon, J., & Opoku, D. (2020). Obstacles to green building project financing: an empirical study in ghana. International Journal of Construction Management, 22(15), 2922-2930. https://doi.org/10.1080/15623599.2020.1832182
Ahlström, H. and Monciardini, D. (2021). The regulatory dynamics of sustainable finance: paradoxical success and limitations of eu reforms. Journal of Business Ethics, 177(1), 193-212. https://doi.org/10.1007/s10551-021-04763-x
Al-Dhaimesh, O. (2020). Green accounting practices and economic value added: an applied study on companies listed on the qatar stock exchange. International Journal of Energy Economics and Policy, 10(6), 164-168. https://doi.org/10.32479/ijeep.10199
Amran, A. and Devi, S. (2008). The impact of government and foreign affiliate influence on corporate social reporting. Managerial Auditing Journal, 23(4), 386-404. https://doi.org/10.1108/02686900810864327
Arena, M. and Conte, A. (2015). Linking environmental accounting to reward systems: the case of the environmental profit and loss account. Journal of Cleaner Production, 108, 625-636. https://doi.org/10.1016/j.jclepro.2015.07.068
Aronica, M., Cracolici, M., Insolda, D., Piacentino, D., & Tosi, S. (2021). The diversification of sicilian farms: a way to sustainable rural development. Sustainability, 13(11), 6073. https://doi.org/10.3390/su13116073
Ashari, M. and Anggoro, Y. (2021). The effect of green accounting practices and organizational size in business sustainability of public hospitals. Jurnal Akuntansi, 11(1), 1-15. https://doi.org/10.33369/j.akuntansi.11.1.1-15
Aulia, A., Febriyanti, F., & Umi, L. (2023). Trend analysis of esg disclosure on green finance performance in indonesia, malaysia & singapore exchanges. Jak (Jurnal Akuntansi) Kajian Ilmiah Akuntansi, 10(1), 79-98. https://doi.org/10.30656/jak.v10i1.5439
Aziz, N., Yau, F., San, O., & Attan, H. (2015). A review on green integration into management control system. Procedia - Social and Behavioral Sciences, 172, 435-441. https://doi.org/10.1016/j.sbspro.2015.01.374
Babon-Ayeng, P., Oduro-Ofori, E., Owusu‐Manu, D., Edwards, D., Kissi, E., & Kukah, A. (2022). Socio-political factors underlying the adoption of green bond financing of infrastructure projects: the case of ghana. Journal of Capital Markets Studies, 6(3), 304-319. https://doi.org/10.1108/jcms-06-2022-0018
Caniato, M., Tudor, T., & Vaccari, M. (2015). Understanding the perceptions, roles and interactions of stakeholder networks managing health-care waste: a case study of the gaza strip. Waste Management, 35, 255-264. https://doi.org/10.1016/j.wasman.2014.09.018
Cunha, F., Meira, E., & Orsato, R. (2021). Sustainable finance and investment: review and research agenda. Business Strategy and the Environment, 30(8), 3821-3838. https://doi.org/10.1002/bse.2842
Deb, B., Rahman, M., & Rahman, M. (2022). The impact of environmental management accounting on environmental and financial performance: empirical evidence from bangladesh. Journal of Accounting & Organizational Change, 19(3), 420-446. https://doi.org/10.1108/jaoc-11-2021-0157
Deegan, C. and Rankin, M. (1997). The materiality of environmental information to users of annual reports. Accounting Auditing & Accountability Journal, 10(4), 562-583. https://doi.org/10.1108/09513579710367485
Dhar, B., Sarkar, S., & Ayittey, F. (2021). Impact of social responsibility disclosure between implementation of green accounting and sustainable development: a study on heavily polluting companies in bangladesh. Corporate Social Responsibility and Environmental Management, 29(1), 71-78. https://doi.org/10.1002/csr.2174
Dhesinta, W. (2019). Sustainable finance on management and protection of environment (study of sustainable finance implementation in indonesia).. https://doi.org/10.2991/sores-18.2019.133
Dosinta, N. and Astarani, J. (2021). Risk disclosures in bank reporting: sustainable finance roadmap era. Journal of Accounting Research Organization and Economics, 4(3), 248-263. https://doi.org/10.24815/jaroe.v4i3.22906
Durrani, A., Rosmin, M., & Volz, U. (2020). The role of central banks in scaling up sustainable finance – what do monetary authorities in the asia-pacific region think?. Journal of Sustainable Finance & Investment, 10(2), 92-112. https://doi.org/10.1080/20430795.2020.1715095
Eeden, L., Dickman, C., Crowther, M., & Newsome, T. (2020). A theory of change for promoting coexistence between dingoes and livestock production. Conservation Science and Practice, 3(3). https://doi.org/10.1111/csp2.304
Egbunike, A. and Okoro, G. (2018). Does green accounting matter to the profitability of firms? a canonical assessment. Ekonomski Horizonti, 20(1), 17-26. https://doi.org/10.5937/ekonhor1801017e
Fang, Y. and Shao, Z. (2022). Whether green finance can effectively moderate the green technology innovation effect of heterogeneous environmental regulation. International Journal of Environmental Research and Public Health, 19(6), 3646. https://doi.org/10.3390/ijerph19063646
Farouk, S., Cherian, J., & Jacob, J. (2012). Green accounting and management for sustainable manufacturing in developing countries. International Journal of Business and Management, 7(20). https://doi.org/10.5539/ijbm.v7n20p36
Fünfgeld, H. (2010). Institutional challenges to climate risk management in cities. Current Opinion in Environmental Sustainability, 2(3), 156-160. https://doi.org/10.1016/j.cosust.2010.07.001
Gallhofer, S. and Haslam, J. (1997). The direction of green accounting policy: critical reflections. Accounting Auditing & Accountability Journal, 10(2), 148-174. https://doi.org/10.1108/09513579710166703
Ganter, C., Chuang, E., Aftosmes-Tobio, A., Blaine, R., Giannetti, M., Land, T., … & Davison, K. (2015). Community stakeholders’ perceptions of barriers to childhood obesity prevention in low-income families, massachusetts 2012–2013. Preventing Chronic Disease, 12. https://doi.org/10.5888/pcd12.140371
Garmabaki, A., Thaduri, A., Famurewa, S., & Kumar, U. (2021). Adapting railway maintenance to climate change. Sustainability, 13(24), 13856. https://doi.org/10.3390/su132413856
Golicic, S. and Smith, C. (2013). A meta‐analysis of environmentally sustainable supply chain management practices and firm performance. Journal of Supply Chain Management, 49(2), 78-95. https://doi.org/10.1111/jscm.12006
Greene, M., Huang, T., Giusto, A., Lovero, K., Stockton, M., Shelton, R., … & Wainberg, M. (2021). Leveraging systems science to promote the implementation and sustainability of mental health and psychosocial interventions in low- and middle-income countries. Harvard Review of Psychiatry, 29(4), 262-277. https://doi.org/10.1097/hrp.0000000000000306
Hanifa, S. and Kahar, A. (2015). Green accounting: comprehension of accounting students.. https://doi.org/10.2991/iceb-15.2015.23
Hermawan, S. (2023). The emergence of green banking: a sustainable financing strategy for protecting against deforestation in asean. The Journal of Environment & Development, 33(1), 96-124. https://doi.org/10.1177/10704965231211591
Hoang, D. and Tuan, D. (2023). Evaluating the role of green financing, international trade and alternative energies on environmental performance in case of chinese provinces: application of quantile regression approach. International Journal of Energy Economics and Policy, 13(2), 500-508. https://doi.org/10.32479/ijeep.14170
Hörisch, J. (2015). Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. Journal of Cleaner Production, 107, 636-645. https://doi.org/10.1016/j.jclepro.2015.05.046
Huang, W., Chen, C., & Fu, Y. (2022). The sustainable island tourism evaluation model using the fdm-dematel-anp method. Sustainability, 14(12), 7244. https://doi.org/10.3390/su14127244
Iturriza, M., Hernantes, J., Abdelgawad, A., & Labaka, L. (2020). Are cities aware enough? a framework for developing city awareness to climate change. Sustainability, 12(6), 2168. https://doi.org/10.3390/su12062168
Kalu, E., Arize, C., Okoyeuzu, C., Nwafor, F., & Okwueze, F. (2022). Financing the energy transition in a green sub‐saharan african (ssa) environment: does energy intensity matter?. Opec Energy Review, 46(4), 413-423. https://doi.org/10.1111/opec.12265
Kaur, A. and Lodhia, S. (2018). Stakeholder engagement in sustainability accounting and reporting. Accounting Auditing & Accountability Journal, 31(1), 338-368. https://doi.org/10.1108/aaaj-12-2014-1901
Khan, K., Mata, M., Martins, J., Nasir, A., Dantas, R., Correia, A., … & Saghir, M. (2022). Impediments of green finance adoption system: linking economy and environment. Emerging Science Journal, 6(2), 217-237. https://doi.org/10.28991/esj-2022-06-02-02
Khurana, S., Luthra, S., Haleem, A., & Mannan, B. (2022). Can sustainability be achieved through sustainable oriented innovation practices? empirical evidence of micro, small and medium scale manufacturing enterprises. Sustainable Development, 30(6), 1591-1615. https://doi.org/10.1002/sd.2330
Kongela, S. (2021). Sustainability potential awareness among built environment stakeholders: experience from tanzania. International Journal of Building Pathology and Adaptation, 41(2), 301-319. https://doi.org/10.1108/ijbpa-09-2020-0082
Korytsev, M. and Morozov, S. (2022). Institutional development of sustainable finance: its potential and current limitations. Journal of Economic Regulation, 13(4), 125-137. https://doi.org/10.17835/2078-5429.2022.13.4.125-137
Kusumahadi, T., Pratikto, A., & Ruli, A. (2021). Determination of sustainable financial index: buku 4 period 2016 – 2019. Kinerja, 25(1), 32-52. https://doi.org/10.24002/kinerja.v25i1.4358
Lupo-Pasini, F. (2022). Sustainable finance and sovereign debt: the illusion to govern by contract. Journal of International Economic Law, 25(4), 680-698. https://doi.org/10.1093/jiel/jgac047
Mahadi, R., Khalid, S., & Stocker, K. (2017). The realisation of green ideals into management practice: the use of management control system in a hospitality setting. Jurnal Pengurusan, 51, 125-134. https://doi.org/10.17576/pengurusan-2017-51-11
Maltais, A. and Nykvist, B. (2020). Understanding the role of green bonds in advancing sustainability. Journal of Sustainable Finance & Investment, 1-20. https://doi.org/10.1080/20430795.2020.1724864
Migliorelli, M. (2021). What do we mean by sustainable finance? assessing existing frameworks and policy risks. Sustainability, 13(2), 975. https://doi.org/10.3390/su13020975
Moorthy, K. and Yacob, P. (2013). Green accounting: cost measures. Open Journal of Accounting, 02(01), 4-7. https://doi.org/10.4236/ojacct.2013.21002
Muchun, W., Zhu, W., & Zhang, S. (2018). The relationship between low-carbon finance and sustainable development: a case study of industrial bank of china. International Journal of Sustainable Energy and Environmental Research, 7(1), 24-34. https://doi.org/10.18488/journal.13.2018.71.24.34
Mutamimah, M., Zaenudin, Z., & Cokrohadisumarto, W. (2022). Risk management practices of islamic microfinance institutions to improve their financial performance and sustainability: a study on baitut tamwil muhammadiyah, indonesia. Qualitative Research in Financial Markets, 14(5), 679-696. https://doi.org/10.1108/qrfm-06-2021-0099
Naeem, M., Karim, S., Rabbani, M., Bashar, A., & Kumar, S. (2022). Current state and future directions of green and sustainable finance: a bibliometric analysis. Qualitative Research in Financial Markets, 15(4), 608-629. https://doi.org/10.1108/qrfm-10-2021-0174
Ngum, F., Alemagi, D., Duguma, L., Minang, P., Kehbila, A., & Tchoundjeu, Z. (2019). Synergizing climate change mitigation and adaptation in cameroon. International Journal of Climate Change Strategies and Management, 11(1), 118-136. https://doi.org/10.1108/ijccsm-04-2017-0084
Nieuwenhuizen, K. (2023). Environmental sustainability and gynaecological surgery: which factors influence behaviour? an interview study. Bjog an International Journal of Obstetrics & Gynaecology, 131(5), 716-724. https://doi.org/10.1111/1471-0528.17709
Oudgou, M. (2021). Financial and non-financial obstacles to innovation: empirical evidence at the firm level in the mena region. Journal of Open Innovation Technology Market and Complexity, 7(1), 28. https://doi.org/10.3390/joitmc7010028
Ozili, P. (2021). Making sustainable finance sustainable. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3799945
Ozili, P. (2022). Assessing global interest in decentralized finance, embedded finance, open finance, ocean finance and sustainable finance. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4312000
Purwohawati, Y., Robiani, B., & Meutia, I. (2020). Green accounting practice on corporate performances. Modern Economics, 22(1), 84-89. https://doi.org/10.31521/modecon.v22(2020)-13
Pyka, I. and Nocoń, A. (2021). Banks’ capital requirements in terms of implementation of the concept of sustainable finance. Sustainability, 13(6), 3499. https://doi.org/10.3390/su13063499
Rahman, M. and Islam, M. (2023). The impact of green accounting on environmental performance: mediating effects of energy efficiency.. https://doi.org/10.21203/rs.3.rs-2604713/v1
Rana, T., Lowe, A., & Azam, M. (2022). Green governmentality and climate change risk management: the case of a regulatory reform in bangladesh. Accounting Auditing & Accountability Journal, 36(3), 801-829. https://doi.org/10.1108/aaaj-05-2021-5286
Ridzak, T. and Žigman, A. (2020). Green finance for sustainable growth, the case of croatia. Intereulaweast Journal for the International and European Law Economics and Market Integrations, 7(2), 131-150. https://doi.org/10.22598/iele.2020.7.2.5
Rodriguez-Rojas, M., Clemente-Almendros, J., Zein, S., & Seguí-Amórtegui, L. (2022). Taxonomy and tendencies in sustainable finance: a comprehensive literature analysis. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.940526
Sadiku, M., Ashaolu, T., Adekunte, S., & Musa, S. (2021). Green accounting: a primer. International Journal of Scientific Advances, 2(1). https://doi.org/10.51542/ijscia.v2i1.10
Saeed, M. and Kersten, W. (2019). Drivers of sustainable supply chain management: identification and classification. Sustainability, 11(4), 1137. https://doi.org/10.3390/su11041137
Saputra, K., Manurung, D., Rachmawati, L., Siskawati, E., & Genta, F. (2021). Combining the concept of green accounting with the regulation of prohibition of disposable plastic use. International Journal of Energy Economics and Policy, 11(4), 84-90. https://doi.org/10.32479/ijeep.10087
Segovia‐Vargas, M. (2023). Sustainable finance: the role of savings and credit cooperatives in ecuador. Annals of Public and Cooperative Economics, 94(3), 951-980. https://doi.org/10.1111/apce.12428
Shan, M., Hwang, B., & Zhu, L. (2017). A global review of sustainable construction project financing: policies, practices, and research efforts. Sustainability, 9(12), 2347. https://doi.org/10.3390/su9122347
Silva, R., Tommasetti, R., Gomes, M., & Macedo, M. (2020). How green is accounting? brazilian students’ perception. International Journal of Sustainability in Higher Education, 21(2), 228-243. https://doi.org/10.1108/ijshe-07-2019-0232
Sinha, A., Mishra, S., Sharif, A., & Yarovaya, L. (2021). Does green financing help to improve environmental & social responsibility? designing sdg framework through advanced quantile modelling. Journal of Environmental Management, 292, 112751. https://doi.org/10.1016/j.jenvman.2021.112751
Siri, M. and Zhu, S. (2019). Will the eu commission successfully integrate sustainability risks and factors in the investor protection regime? a research agenda. Sustainability, 11(22), 6292. https://doi.org/10.3390/su11226292
Soundarrajan, P. and Vivek, N. (2016). Green finance for sustainable green economic growth in india. Agricultural Economics (Zemědělská Ekonomika), 62(1), 35-44. https://doi.org/10.17221/174/2014-agricecon
Stasytytė, V. (2015). Conceptualization of financial system sustainability. Journal of Security and Sustainability Issues, 4(4), 391-402. https://doi.org/10.9770/jssi.2015.4.4(6)
Strack, R., Orsini, M., Fearnow-Kenney, M., Herget, J., Milroy, J., & Wyrick, D. (2015). Developing a web-based tool using information and communication technologies to expand the reach and impact of photovoice. American Journal of Health Education, 46(4), 192-195. https://doi.org/10.1080/19325037.2015.1044585
Strauß, N. (2021). Communicating sustainable responsible investments as financial advisors: engaging private investors with strategic communication. Sustainability, 13(6), 3161. https://doi.org/10.3390/su13063161
Tafsir, M. (2021). Sustainable finance: a strategy to increase good corporate governance and company value in banking industry. Atestasi Jurnal Ilmiah Akuntansi, 4(2), 154-162. https://doi.org/10.33096/atestasi.v4i2.828
Taghizadeh–Hesary, F., Yoshino, N., & Phoumin, H. (2021). Analyzing the characteristics of green bond markets to facilitate green finance in the post-covid-19 world. Sustainability, 13(10), 5719. https://doi.org/10.3390/su13105719
Temple, C., Vergamini, D., Bartolini, F., & Brunori, G. (2020). The impact of changes in regulatory and market environment on sustainability of wine producers: a structural equation model. Wine Economics and Policy, 9(1), 51-61. https://doi.org/10.36253/web-7689
Trisnawati, L., Nawangsari, L., Lo, S., Zainal, V., & Irmaningsih, E. (2022). Literature review of corporate sustainability in practices (the implementation of green accounting in modern industries). International Journal of Social Science and Human Research, 05(11). https://doi.org/10.47191/ijsshr/v5-i11-48
Tsindeliani, I., Proshunin, M., Sadovskaya, T., Tropskaya, S., Davydova, M., & Popkova, Z. (2023). Comparative legal aspects of the eu and russia policy in the field of green financing. International Journal of Sustainable Development and Planning, 18(3), 877-890. https://doi.org/10.18280/ijsdp.180323
Wang, B. (2023). Can green finance promote high-quality energy development? the case of china. The Journal of Risk Finance, 25(1), 64-79. https://doi.org/10.1108/jrf-08-2023-0194
Wilmshurst, T. and Frost, G. (2001). The role of accounting and the accountant in the environmental management system. Business Strategy and the Environment, 10(3), 135-147. https://doi.org/10.1002/bse.283
Wright, T. and Horst, N. (2013). Exploring the ambiguity: what faculty leaders really think of sustainability in higher education. International Journal of Sustainability in Higher Education, 14(2), 209-227. https://doi.org/10.1108/14676371311312905
Xiao-wen, W. and Dou, X. (2022). Application of sustainable supply chain finance in end-of-life electric vehicle battery management: a literature review. Management of Environmental Quality an International Journal, 34(2), 368-385. https://doi.org/10.1108/meq-02-2022-0031
Ya, S. (2018). Sustainable financing for biogas fuel from palm oil industry waste. Recent Advances in Petrochemical Science, 5(1). https://doi.org/10.19080/rapsci.2018.05.555652
Yakovlev, I. and Nikulina, S. (2019). Indonesia’s strategy for sustainable finance. Financial Journal, (6), 83-95. https://doi.org/10.31107/2075-1990-2019-6-83-95
Ye, R. and Huang, W. (2023). The study on the investor behaviors and its influencing factors of sustainable financial products by big data analysis algorithms.. https://doi.org/10.1117/12.2669990
Yeow, K. and Ng, S. (2021). The impact of green bonds on corporate environmental and financial performance. Managerial Finance, 47(10), 1486-1510. https://doi.org/10.1108/mf-09-2020-0481
Ziemba, M. (2023). Sustainable finance – where we are and how we can go further. Finanse I Prawo Finansowe, 1(37), 123-137. https://doi.org/10.18778/2391-6478.1.37.07
Zioło, M., Bąk, I., & Cheba, K. (2020). The role of sustainable finance in achieving sustainable development goals: does it work?. Technological and Economic Development of Economy, 27(1), 45-70. https://doi.org/10.3846/tede.2020.13863
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Fitriani Fitriani (Author)

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

















