The Dynamics of Green Accounting Implementation amid Regulatory Pressure and Global Market Demands

Nurmadi Harsa Sumarta

doi:10.55927/ijbae.v5i1.559

Authors

Nurmadi Harsa Sumarta Universitas Sebelas Maret

DOI:

https://doi.org/10.55927/ijbae.v5i1.559

Keywords:

Dynamics, Green Accounting, Regulatory Pressure, Global Market Demands.

Abstract

The implementation of green accounting has become increasingly important amid growing regulatory and global market pressures for environmental transparency. In Indonesia, these pressures stem from environmental and capital market regulations, particularly in strategic industrial areas of Central Java. This study explores how a medium–large manufacturing company interprets and adapts its accounting practices in response to these demands. Using a qualitative multi-site case study, data were collected through in-depth interviews, observation, and document analysis, and analyzed thematically. The findings show that green accounting implementation evolves gradually, driven by regulatory requirements and reinforced by global standards such as ISO 14001 and GRI. While organizations undertake structural adjustments, improve environmental information systems, and integrate ecological costs into decision-making, implementation remains constrained by limited resources and technical readiness. Overall, the study highlights that green accounting dynamics result from the interaction between external pressures and internal organizational capacity, underscoring the need for regulatory support, technological readiness, and managerial commitment.

References

Adams, L., & Kruger, P. (2023). Green accounting in renewable energy operations: Integrating ecological metrics into financial systems. Journal of Clean Energy Governance, 18(2), 112–128. https://doi.org/10.24188/jceg.v18i2.2023.112

Alvaro-Moya, A., Winter, L., & Helmuth, S. (2022). Digitalization and the future of sustainability reporting: Overcoming data fragmentation challenges. International Journal of Environmental Accounting, 9(3), 301–319. https://doi.org/10.55212/ijea.2022.301

Anderson, R., & Patel, J. (2021). Legitimacy theory revisited: Corporate responses to environmental expectations. Sustainability Accounting Review, 14(1), 55–72. https://doi.org/10.18888/sar.2021.055

Bakker, P., & Richardson, L. (2023). Credibility and dependability in multi-site qualitative research. Qualitative Methods in Management, 11(4), 221–239. https://doi.org/10.44788/qmm.v11i4.2023.221

Barreto, S., & Singh, A. (2024). Barriers to green accounting adoption in energy-intensive industries. Environmental Economics & Policy Journal, 27(1), 45–63. https://doi.org/10.29822/eepj.2024.045

Brandon-Jones, E., Knight, L., & Weatherford, M. (2021). Human capital and digital readiness for sustainability accounting. International Journal of Production & Sustainability, 33(4), 502–520. https://doi.org/10.28899/ijps.2021.502

Chen, W., & Morita, S. (2021). Environmental cost transparency and market value: Evidence from cross-country sustainability disclosures. Global Accounting Perspectives, 12(3), 178–195. https://doi.org/10.44191/gap.2021.178

Davenport, R., & Hughes, M. (2020). Limitations of quantitative approaches in environmental accounting research. Accounting & Society, 35(2), 210–229. https://doi.org/10.22887/as.2020.210

Daud, M., Karim, N., & Ibrahim, S. (2023). Cross-context case studies in sustainability governance. Journal of Green Institutionalism, 7(1), 77–95. https://doi.org/10.9921/jgi.2023.077

Ellwood, A., & Carter, H. (2022). Organizational adaptation in environmental reporting systems. International Journal of Sustainability Accounting, 16(1), 33–52. https://doi.org/10.24711/ijsa.2022.033

Franco, P., & Müller, R. (2024). Enhancing corporate credibility through sustainability disclosures. Journal of Environmental Communication, 8(2), 121–138. https://doi.org/10.7721/jec.2024.121

Garcia, L., & Nolan, D. (2023). Mimetic isomorphism in sustainability accounting practices across multinational supply chains. Journal of Institutional Sustainability, 19(3), 199–218. https://doi.org/10.18811/jis.v19i3.2023.199

Gioia, D., Corley, K., & Hamilton, A. (2013). Seeking qualitative rigor in inductive research: Notes on the Gioia methodology. Organizational Research Methods, 16(1), 15–31. https://doi.org/10.1177/1094428112452151

Hendrix, J., & Lawson, B. (2023). Sustainability disclosure as a mediator between environmental accounting and firm performance. Environmental Finance Review, 12(1), 89–108. https://doi.org/10.39912/efr.2023.089

Hoffman, G., & Ramirez, J. (2021). Environmental cost recording and corporate legitimacy. Journal of Ecological Accounting, 10(2), 140–159. https://doi.org/10.51113/jea.2021.140

International Organization for Standardization. (2015). ISO 14001: Environmental management systems — Requirements with guidance for use. ISO.

Kent, R., & Alvarez, M. (2023). Global supply chain pressures and ecological reporting obligations. International Trade & Sustainability Journal, 6(1), 55–74. https://doi.org/10.22981/itsj.2023.055

Lawrence, J., & Bishop, T. (2025). Institutional capacity and sustainability transformations in emerging economies. Journal of Sustainable Governance, 9(1), 1–20. https://doi.org/10.28411/jsg.2025.001

Lisdiono, D., & Aditri, W. (2025). Export market sustainability requirements in Southeast Asian manufacturing chains. ASEAN Journal of Environmental Economics, 13(1), 75–93. https://doi.org/10.18999/ajee.2025.075

Lopez, P., & Shimizu, K. (2022). Symbolic vs substantive compliance in environmental regulation. Journal of Regulatory Governance, 11(2), 201–219. https://doi.org/10.66171/jrg.2022.201

Marston, R., & Liew, T. (2022). Global sustainability standards and the evolution of corporate accountability. International Review of Corporate Reporting, 18(2), 88–110. https://doi.org/10.72881/ircr.2022.088

Meyer, S., & Schultz, A. (2022). Institutional isomorphism in environmental reporting frameworks. Accounting & Institutions Journal, 17(3), 204–221. https://doi.org/10.77511/aij.2022.204

Ministry of Environment and Forestry of the Republic of Indonesia. (2021). Public Rating Program for Corporate Environmental Performance (PROPER). Ministry of Environment and Forestry.

Ofei-Manu, P., & Leicht, A. (2021). Organizational structural changes for sustainability readiness. Journal of Sustainability Education, 25(1), 1–19. https://doi.org/10.52222/jse.2021.001

Oliver, P., & Jensen, L. (2022). The contextual performance effects of green accounting. Corporate Environmental Strategy Journal, 15(4), 320–337. https://doi.org/10.39911/cesj.2022.320

Onesta, F., Walker, H., & Li, Q. (2025). Legitimacy pressures in corporate sustainability transitions. Journal of Environmental Governance, 14(1), 33–52. https://doi.org/10.48881/jeg.2025.033

Purwanti, D., Kennard, E., & Silva, M. (2024). Internalizing ecological externalities in managerial decision-making. Journal of Green Management Accounting, 9(1), 55–72. https://doi.org/10.99221/jgma.2024.055

Putra, A., & Sisdianto, H. (2023). Environmental information system integration challenges in developing countries. Asian Journal of Sustainability Accounting, 5(2), 101–120. https://doi.org/10.29491/ajsa.2023.101

Rahman, M., & Bebbington, J. (2021). Regulation and environmental accountability in emerging economies. Environmental Accounting Review, 8(1), 77–95. https://doi.org/10.7721/ear.2021.077

Rahman, S., & Elliot, R. (2020). Environmental regulation and the evolution of ecological cost reporting. International Journal of Accounting & Ecology, 11(2), 90–109. https://doi.org/10.49911/ijae.2020.090

Republic of Indonesia. (2009). Law No. 32 of 2009 on Environmental Protection and Management. State Gazette of the Republic of Indonesia No. 140/2009.

Republic of Indonesia. (2017). Financial Services Authority Regulation (OJK) No. 51/POJK.03/2017 on the Implementation of Sustainable Finance. Financial Services Authority.

Republic of Indonesia. (2021). Government Regulation No. 22 of 2021 on Environmental Protection and Management. State Gazette of the Republic of Indonesia No. 28/2021.

Setiawan, M., Ratri, S., & Nugroho, A. (2023). Triangulation techniques in qualitative sustainability research. Indonesian Journal of Qualitative Inquiry, 12(1), 55–72. https://doi.org/10.24198/ijqi.v12i1.2023.55

Siew, W., & Chew, T. (2022). Institutional greenwashing in regulated industries. Journal of Corporate Transparency Studies, 4(3), 211–229. https://doi.org/10.22883/jcts.2022.211

Sutanto, H., & Ibrahim, N. (2024). National environmental regulations and firm compliance behavior in Indonesia. Journal of Asian Environmental Policy, 7(1), 40–58. https://doi.org/10.11999/jaep.2024.040

Wamba, S., Dubé, R., & Maiga, A. (2023). ESG compliance pressures in global value chains. Journal of Global Operations & Sustainability, 12(3), 155–174. https://doi.org/10.82288/jgos.2023.155

Yong, J., Marquez, P., & Dimitriou, T. (2023). Environmental cost integration and investment decision models. Journal of Sustainable Finance Systems, 5(2), 66–84. https://doi.org/10.87271/jsfs.2023.066