Costing for Sustainability: Integrating Environmental Costs into Accounting
Author(s): Dr. Janhavi Shridhar Bedekar
Publication #: 2604024
Date of Publication: 17.04.2026
Country: India
Pages: 1-10
Published In: Volume 12 Issue 2 April-2026
Abstract
Sustainability has emerged as a central concern in contemporary business strategy, yet conventional accounting systems often fail to capture environmental externalities. This conceptual paper examines the integration of environmental costs into accounting practices through sustainability-oriented costing frameworks. It argues that traditional cost accounting understates the true cost of production by excluding ecological impacts such as carbon emissions, resource depletion, and waste generation. The paper synthesizes existing theoretical perspectives including environmental management accounting (EMA), full cost accounting, and life cycle costing to develop a structured understanding of sustainability costing. It highlights how incorporating environmental costs can enhance decision-making, improve resource efficiency, and align organizational strategies with sustainable development goals. Further, the study proposes a conceptual framework linking environmental cost identification, measurement, allocation, and reporting with firm performance outcomes. It also discusses challenges such as measurement complexity, lack of standardized reporting, and resistance within organizations. The paper contributes by offering a comprehensive conceptual model that integrates environmental considerations into accounting systems. It provides directions for empirical validation and supports policymakers and practitioners in advancing sustainable financial practices.
Keywords: Sustainability, Environmental Costs and Accounting
Download/View Count: 1
Share this Article