Green accounting, material flow cost accounting and environmental performance

Abstract

The purpose of this study is to determine the effects of green accounting and Material Flow Cost Accounting (MFCA) on environmental performance as indicated by PROPER rating. This study is conducted on cement manufacturing companies in Indonesia by using a descriptive quantitative research model tested on three variables: green accounting, MFCA, and environmental performance. The green accounting aspect is taken from the extent of Global Reporting Initiative (GRI) disclosure and MFCA is focused on the effectiveness of costs. The MFCA dimensions are production costs, size of production area, and production value. Environmental performance aspect is measured by the PROPER rating issued by the Ministry of Environment and Forestry. The study is conducted in several stages. First, a literature review of previous research related to green accounting, MFCA, and environmental performance is performed. Next, the research problems are formulated. After that, the data from the companies are collected and analyzed by using SmartPLS. Finally, it is concluded that green accounting affects environmental performance, whereas MFCA has no effect on environmental performance.