Toward a Model for Measuring Results of Environmentally Sustainable Business Practices Utilizing Management Accounting Techniques: A Balanced Scorecard Approach

This study begins by presenting an historical framework of pollution and environmental considerations through the industrialization of the Twentieth Century. That is, the cost evasion of organizations dumping their environmental responsibilities upon society. Although economic development requires the consumption of resources and the byproduct production of various effluents, managing this negative externality is paramount in the Twenty-first Century business setting.;Aiding mangers with techniques that provide decision-makers enhanced information, as well as adding profit to the firm, the management accounting profession has evolved throughout this same industrializing timeframe. It is incumbent upon the profession that techniques fostering the strategic management of the firm regarding this mismanaged arena are developed.;Our global society indicates that a paradigm shift has occurred regarding both the perception and correction of environmentally unfriendly organizations and practices. From the United Nations' (1987) Brundtland Commission that first termed the phrase and definition of environmental sustainability, through the Nobel awards, little doubt remains about the importance of the environment for businesses and their stakeholders.;This study aids in discerning and developing the mechanisms necessary to reduce and correct environmental damages, the cost must be placed on where the problem originates. Eliminating cost evasion through statute or market forces, and then allowing organizations to manage their respective issues through environmentally sustainable business practices (ESBP), executes this desired outcome. Therefore, measuring ESBP through management accounting techniques provides the information to manage ESBP, and developing a balanced scorecard to incorporate ESBP in the strategic objectives of the firm achieves that result.