Department

Accountancy

Document Type

Article

Publication Date

12-1-2014

Abstract

The purpose of this paper is to evaluate and analyze the incremental costs of businesses becoming “green.” It answers the overarching question: are businesses becoming eco-friendly or eco-frenzy? For the purposes of this paper, eco-friendly is defined as companies that strive to be environmentally conscious. Conversely, companies that are eco-frenzy become environmentally conscious for the wrong reasons, such as gaining an environmental reputation. With the increase in popularity of corporate social responsibility (CSR) and the legal requirements related to environmental laws, more businesses have been incorporating the ideas of sustainability into their strategic positioning. At the start of the 21st century a disclosure framework for sustainability was created and guidelines of Global Reporting Initiative (GRI) were put into practice. Hence, companies are producing separate environmental and sustainable reports as part of their annual financial statements. These reports include the information of costs incurred and benefits and savings realized as a result of implementing environmental practices. A sample of four companies, Canon, IBM, Intel, and Texas Instrument’s 2008-2010, annual environmental reports were used as data for this study. The cost-benefit effects were analyzed and conclusions drawn. The results of this study reveal that IBM and Canon were eco-friendly while Intel and Texas Instruments showed an eco-frenzy correlation.

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