Title: Measuring Environmental Costs and Environmental Accounting Disclosure and Their Impact on Improving the Financial and Environmental Performance of Economic Institutions: An Applied Analytical Study
Authors: Alaa M. Almudhafar, Safaa M. Almudhafar
Volume: 10
Issue: 6
Pages: 1-10
Publication Date: 2026/06/28
Abstract:
The aim of this research is to critically analyse the implications of the accurate measurement of environmental costs and the level of environmental disclosure to enhance both financial and environmental performance of economic entities. In this context, this analysis has even more importance because of the current global trend of implementing sustainability frameworks and mechanisms that hold governments responsible for their environmental performance. The main dilemma that this study tackles is that the measurement of environmental costs may be inadequate and thus provide incomplete or false accounting information. These deficiencies greatly weaken management's ability to determine the actual financial cost of its operations. The study was conducted using descriptive analytical method which is used to trace the relevant accounting literature and international accounting standards. The ultimate goal is to develop an innovative applied framework that will result in the accurate classification, precise measurement and transparent disclosure of the environmental costs and risks that are organically coupled to an integrated performance framework. The results prove that the proactive application of environmental cost measurement is able to identify the true costs, increase the accuracy of the final report and bring managerial decision-making into order. At the same time, systematic disclosure strengthens transparency and has a positive effect on the trust of stakeholders. The study suggests that the development of comprehensive environmental accounting systems, the capacity building of financial professionals and the modernization of environmental disclosure systems are essential to keep pace with the current developments of sustainability.