School of Management, Unit Catalogue 2008/09 |
MN50430 Environmental accounting and finance |
| Credits: 6 |
| Level: Masters |
| Semester: 2 |
| Assessment: CW 20%, EX 80% |
| Requisites: |
| Before taking this unit you must take MN50318 |
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Aims: To examine scholarship in the fields of accounting and finance as they pertain to the interaction between economic entities and the natural environment, with a focus on commercial firms.
Learning Outcomes: By the end of this unit, the student should be able to: * discuss the tensions between and means of aligning economic and environmental interests, and the role of accounting and financial decision-making mechanisms in this process; * explain the role of corporate environmental policy within the broader concepts of corporate social responsibility, accountability and sustainability; * discuss the impact of various types of public environmental policy measure (e.g. emissions permits) on a firm's financial statements, taking account of any relevant international financial reporting standards; * critically evaluate prescriptive frameworks for and positive theories of firms' environmental accounting practice by reference to the empirical literature, * critically discuss the literature dealing with the impact of a firm's environmental performance and reporting on its business performance and value; * discuss the recognition of environmental issues in the investment decisions of the firm (e.g. through carbon costing) and its financiers, and the implications of 'socially responsible investment' for both parties; * explain in broad terms the role of accounting in environmental policy and management at the ecological and macroeconomic levels. Skills: Intellectual Skills * the ability to apply the intellectual framework and research methods of a discipline in a novel setting; TFA * the ability to draw together concepts from different disciplines in the understanding of issues and their consequences. TFA Professional Practical Skills * the ability to recommend appropriate methods of accounting for environmental impacts by and on the firm; TFA * the ability to explain the relevance of environmental issues in financial decision-making. TFA Transferable/Key Skills * the ability to incorporate considerations of environmental change and public policy responses in the analysis of business issues. FA Personal/Interpersonal * the ability to present complex issues in a readily understandable way. FA Content: * Forms of anthropogenic environmental degradation, economic analysis (especially the concepts of externality, market failure and welfare) and types of policy response, particularly in terms of cost internalisation mechanisms (taxation and permit trading) in an international context and their effect on the firm. * Concepts of corporate social responsibility, accountability and sustainability and their role in corporate environmental policy. * Accounting for internalised environmental costs and the effects on financial statement analysis. * Regulatory and voluntary approaches to accounting for environmental externalities, proxy methods (narrative and indicator-based reporting, particularly the GRI) and barriers to full-cost accounting. * Theories of motivation for voluntary reporting and empirical tests thereof, including comparative international analysis of corporate environmental reporting. * Theory and empirical evidence on the relationships among social/environmental performance and reporting, business performance and firm value, particularly in the context of market-based research on value relevance and the event methodology. * Accounting for environmental risk and impacts on the firm. * Internal (management) accounting for environmental costs and their recognition in financial decision-making, e.g. use of the UK's carbon shadow price in project appraisal. * Development of spot and derivative carbon emissions markets, and evidence of their efficiency and effectiveness. * The role of international development policy in the operation of carbon markets, e.g. the CDM, and its financial implications for the corporate sector. * Codes of best practice for the recognition of ESG criteria in lending and iinvestment decisions, particularly international codes such as the Equator Principles and the UN PRI. * The growth in the "socially responsible investment" market, investor motivations and empirical analysis of fund performance. * Concepts of accounting for supra-corporate entities: ecological accounting and macro-economic environmental accounting, including the use of satellite accounts and sustainable development indicators. |