This article aims to analyse how environmental accounting instruments can be linked to corporate reward systems for motivating a company's employees to embrace more environmentally friendly behaviours. To this aim, the paper focuses on a specific instrument – the Environmental Profit and Loss Account – that grounds on the idea of complementing the traditional profit and loss account by including figurative revenues and costs associated to the environmental impact of business activities. Based on the empirical evidence, derived from a multinational Do-It-Yourself retailing chain, the paper discusses how key design choices in the process of development of the Environmental Profit and Loss Account should be carried out to use this instrument as an input for the reward system and what problems and criticisms this choice implies. In so doing, the paper contributes to fill a gap in the state of the art literature that so far has given limited attention to the problem of linking environmental accounting instruments to corporate reward systems. Based on the case analysis, the paper concludes with some guidelines concerning the key aspects that should be taken into consideration for this prospect use: alignment with the company's strategy, definition of quantitative and common objectives, integration with other human resource practices, and possible connection to monetary rewards. Then, for each aspect, the paper discusses the rise of potential trade-offs between completeness and controllability of the included items, environmental and economic performance, cost and precision of the system itself.

Linking environmental accounting to reward systems: the case of the Environmental Profit and Loss Account

ARENA, MARIKA;MELACINI, MARCO;CONTE, ANTONIO
2015-01-01

Abstract

This article aims to analyse how environmental accounting instruments can be linked to corporate reward systems for motivating a company's employees to embrace more environmentally friendly behaviours. To this aim, the paper focuses on a specific instrument – the Environmental Profit and Loss Account – that grounds on the idea of complementing the traditional profit and loss account by including figurative revenues and costs associated to the environmental impact of business activities. Based on the empirical evidence, derived from a multinational Do-It-Yourself retailing chain, the paper discusses how key design choices in the process of development of the Environmental Profit and Loss Account should be carried out to use this instrument as an input for the reward system and what problems and criticisms this choice implies. In so doing, the paper contributes to fill a gap in the state of the art literature that so far has given limited attention to the problem of linking environmental accounting instruments to corporate reward systems. Based on the case analysis, the paper concludes with some guidelines concerning the key aspects that should be taken into consideration for this prospect use: alignment with the company's strategy, definition of quantitative and common objectives, integration with other human resource practices, and possible connection to monetary rewards. Then, for each aspect, the paper discusses the rise of potential trade-offs between completeness and controllability of the included items, environmental and economic performance, cost and precision of the system itself.
Environmental accounting; Environmental impact; Environmental performance indicator; Environmental Profit and Loss Account; Internal accountability; Reward system
File in questo prodotto:
File Dimensione Formato  
Arena, Conte, Melacini 2015 Linking environmental accounting to reward systems POST PRINT.pdf

Open Access dal 02/12/2017

: Post-Print (DRAFT o Author’s Accepted Manuscript-AAM)
Dimensione 254.02 kB
Formato Adobe PDF
254.02 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11311/979277
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 11
  • ???jsp.display-item.citation.isi??? 4
social impact