Green Accounting: A Research Note from Italy

• In Event: Climate, the Environment, and Sustainability

Abstract

The problem of climate change, caused by greenhouse gas emissions, was considered an almost
irrelevant issue by many States and businesses until the last decade. Climate change and the issue of
emission rights of greenhouse gases produce relevant effects on the financial performance of
companies. Their effects fall on models of accounting and reporting that are called upon to detect,
report and monitor them.
The lack of an internationally accepted and shared accounting standard in the field of the detection
of emission rights and the absence of a global disclosure framework do not favour the comparability
and therefore the significance of financial reports to potential users. This paper starts with a
recapitulation of how emissions trading became a cornerstone of the European Union’s climate
policy. Several approaches to accounting for emission rights have been proposed. In the present
paper, the implications of adopting different approaches are evaluated in a normative context.
Drawing upon these preconditions, this paper analyses the development of accounting treatment of
emissions rights in the framework of European Union Emissions Trading Scheme (EU ETS). The
analysis is based, observing an italian case study.

Author

• Paolo Esposiro, Università del Piemonte Orientale