Value drivers of corporate eco-efficiency: Management accounting information for the efficient use of environmental resources

Frank Figge, Tobias Hahn

Research output: Indexed journal article Articlepeer-review

82 Citations (Scopus)

Abstract

Eco-efficiency is oftentimes considered the gold standard for managerial decision making in an environmental context because it seemingly reconciles the efficient use of capital and the efficient use of environmental resources. We challenge this view by disaggregating eco-efficiency to provide an in-depth analysis of corporate eco-efficiency and to identify the drivers of an efficient use of environmental resources. By building on the value-based approach in financial management, we extend the rationale of economic value drivers to develop drivers for the efficient use of environmental resources. We apply this logic to analyze the carbon-efficiency of major car manufacturers worldwide. The analysis clarifies the conceptual relationship between the use of economic and environmental resources by firms. The analysis shows that the drivers of capital efficiency and eco-efficiency are not fully congruent. These findings underpin critical voices that question the supposedly unproblematic link between corporate eco-efficiency and economic value creation. We illustrate that the efficient use of environmental resources is complementary rather than instrumental to capital efficiency. Consequently, the challenge of managing eco-efficiency is to unshackle it from the current capital-oriented domination. The findings provide managerial guidance on the value-creating use of environmental and economic resources. Conceptually, our argument contributes to the debate between critical and managerial perspectives on environmental accounting and helps to address the current standoff between these two camps.

Original languageEnglish
Pages (from-to)387-400
Number of pages14
JournalManagement Accounting Research
Volume24
Issue number4
DOIs
Publication statusPublished - Dec 2013
Externally publishedYes

Keywords

  • Car manufacturing
  • Carbon performance
  • Eco-efficiency
  • Environmental management accounting
  • Sustainable Value drivers

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