Accounting for carbon emissions

Although traditionally associated with numbers and finance, accounting also has a role to play in a lower-carbon future, according to Victoria research.

Dr Binh Bui

Dr Binh Bui from the School of Accounting and Commercial Law is investigating how many organisations make adjustments to their accounting systems to allow for carbon issues, how they do it and whether accounting can help reduce carbon emissions.

Binh says she wanted to find out how both private and public sector organisations across a range of industries were responding to regulations around climate change.

“It’s clear that accounting does have an important role—in response to stricter environmental regulations, organisations need to change their accounting systems to measure, report and manage their carbon emissions levels. However, there’s a certain amount of suspicion that organisations can use accounting as ‘greenwashing’—reporting on emissions without actually doing anything about it.

“So there are two sides, but underlying both is the belief that we need a fundamental, over-arching accounting framework to move corporations towards a lower-carbon future.

“Whether an organisation is actively trying to reduce emissions depends on the certainty of policies and regulations being  set at a government level. That’s true not just in New Zealand but around the world—organisations don’t want to invest in something only for the rules to change and they end up wasting money.”

Binh wants to also look into the prevalence of carbon assurance, and whether organisations see any benefits from that process.

“Carbon assurance is certainly not as straightforward as a financial audit—this area is traditionally an environmental science, which you physically have to measure. I’m keen to see how accounting expertise can be applied to help increase the transparency of carbon reporting.”