1.

0 INTRODUCTION

This chapter provides an overview of the study's history, research problem, objectives, and
questions. It also discusses the study's importance, delimitations, and limitations. After that, a
summary of the chapter follows.

1.1BACKGROUND OF THE STUDY

Businesses everywhere are facing more and more pressure to think about their environmental
impact rather than just their financial performance(Phu et al. 2020). An increasing amount of
focus is being placed on nature and the surrounding environment as sustainable development
gains traction worldwide. According to M. Hasyim Ashari (2021), businesses have a social
obligation to safeguard the environment and advance sustainable development. As a corporate
philosophy, sustainable accounting is now gaining ground this Generation Z, especially when it
comes to adoption on a global scale. The integration of the three performance domains—
economic, social, and environmental—is commonly understood as sustainability(Phu et al.
2020).

According to Rahman and Ekramoglu (2023), green accounting, also known as , is a branch of
accounting that measures, communicates, and interprets a country's or company's financial
activities by combining economic and environmental data. This approach shows how economic
decisions affect the environment by documenting environmentally friendly corporate activities
on balance sheets(Dura and Suharsono 2022). Green accounting is growing more and more
significant in light of the need to protect the environment and to foster sustainability (Joshi &
Rahman, 2015). Traditional accounting systems primarily focus on financial aspects, often
overlooking the environmental impact of economic activities. However, in an era where
sustainability and environmental consciousness are critical, there is a growing need to integrate
environmental considerations into accounting practices. Green accounting can be broken intro
three branches which are environmental accounting
 Due to the industry's explosive growth, some business people have come under fire for not
maintaining the corporate environment in line with the nation's economic boom. The company is
driven to improve its performance by these dangers. To protect future generations, however,
businesses must take into account the economic order while preventing environmental harm.
Thus, one of the ways the organization tries to consistently sustain the advancement that
contributes to human well-being, both now and in the future, is through sustainable
development(Dura and Suharsono 2022). This implies that all businesses will constantly be
involved in long-term initiatives aimed at fostering community and economic growth (Loen,
2018).

In today's cutthroat business environment, a company's ability to survive depends on its capacity
for sustainable development. Revenue growth that a business may accomplish within its
operational and budgetary limits is referred to as sustainable development (Patel, João, Pagano,
& Olson, 2020). To attain development sustainability, which also emphasizes a company's
performance on social and environmental concerns, businesses must go above and beyond the
financial baseline. According to Elkington, 1997, he highlighted the three fundamental values:
economic prosperity, social justice, and environmental purity. One key concept in the
implementation of corporate sustainability is sustainable development. A subset of corporate
operations involved in attaining sound strategy and performance results is called sustainable
development(Dura and Suharsono 2022).

Green Accounting System (GAS) proposes a framework that considers the environmental impact
of firms within their accounting system. It goes beyond financial metrics to include
environmental information, such as Environmental costs like Cleaning of contaminated areas,
waste treatment, fines, and taxes related to environmental violations, green technology
acquisitions for example Investments in eco-friendly technologies, and Integration of
environmental externalities like accounting for indirect effects on the environment.
In Colombia a developing country, an exploratory study was conducted. The study analyzed 150
Colombian industrial and commercial companies. Surprisingly, 100% of these companies had
not yet integrated environmental practices within their accounting systems (Gonzalez & Peña
Vinces, 2023). Other developing countries like Zimbabwe around the globe are still struggling
with implementing GAS in all their companies (Chengeta, Moyo, & Mapfumo, 2024).

Zimbabwe is facing environmental challenges such as deforestation, soil degradation, and water
scarcity. Green accounting helps quantify the costs associated with these challenges. However,
Zimbabwe is committed to achieving the United Nations’ Sustainable Development Goals
(SDGs). Integrating green accounting aligns with SDG 12 which is Responsible Consumption
and Production and SDG 13 for Climate Action (United Nations, 2024).

In the year 2022, Zimbabwe’s GDP was approximately $27.37 billion. The economy experienced
a growth rate of 6.5% in 2022 (World Bank Data , 2022). Approximately 45% of the land area is
covered by forests. 49% of the population has access to electricity. 31% of freshwater
withdrawals are from internal resources. Only 1.3% of total electricity production comes from
renewable sources (excluding hydroelectric) as of 2015. 32% of the population uses safely
managed sanitation services (World Bank Data , 2022). In 2016, Zimbabwe generated
approximately 1.9 million tons of municipal solid waste (MSW) from residential, commercial,
and industrial areas. Harare City alone contributed 371,697 tons of MSW, with an estimated 90%
being either recyclable or reusable ( (Fiches, 2024)Zimbabwe abundant natural resources,
including arable land, forests, minerals, and surface and groundwater. The country has 12
national parks and one trans-frontier park (Viriri & Matiza, 2007). Notably, Zimbabwe’s lithium
deposits are the largest in Africa and the sixth-largest globally (International Trade
Administration , 2024). Zimbabwe faces economic challenges while striving to balance
environmental protection and resource utilization. Sustainable practices are crucial for the
nation’s future. Zimbabwe has made strides in sustainable development, but challenges persist in
the case of carbon emission, Financial Performance, and Natural Capital Depletion.
In a case study of a Zimbabwean company The Sino Zimbabwe Cement Company (SZCC), it
faced environmental challenges related to emissions and waste arising from its cement
production operations. The company operated in a context where environmental consciousness
and sustainable development were critical. SZCC successfully reduced dust emissions,
contributing to improved air quality. The volume of discharged effluent decreased, benefiting
local water resources. Residuals of oil contaminants were minimized. SZCC achieved energy
consumption reduction. However, solid waste generation and disposal remained a concern. The
SZCC case highlights the importance of integrating environmental considerations into industrial
operations. By adopting cleaner production methods, companies can contribute to sustainable
development while minimizing their ecological footprint (Cavalletti, Di Fabio, Lagomarsino, &
Ramassa, 2020).

Green accounting provides a holistic perspective, bridging economic, social, and environmental
dimensions (Chris & Lisa, 2021). By integrating green accounting practices, Zimbabwe can pave
the way for a more sustainable future, where prosperity coexists with ecological balance
(Chiutsi, Muposhi, & Chikodzi, 2021). Implementing GAS could enhance traceability in
environmental accounting and promote cleaner production. Cleaner production contributes to
increased environmental quality and sustainable development.

This research will focus on an African country’s perspective on the global literature on
sustainability and environmental accounting in annual reports. It will also provide a basis for
corporate decision-making as well as determining the effect of accounting for sustainability and
the environment on the performance of listed companies in Zimbabwe. However, should
companies continue with environmental accounting in a challenging business environment such
as Zimbabwe when there might be an unfavorable economic return? This is why it is important
to examine the relevance of environmental accounting practices to the sustainability and
performance of companies.
1.2 Statement of the problem

The corporate world, academics, and policymakers alike have a consensus that there is a great
need to provide quality information about green accounting to improve sustainability and how
firms can have long-term viability. Despite growing awareness of environmental issues, there are
critical gaps in the integration of green accounting practices within Zimbabwe’s economic
framework. These gaps hinder the realization of sustainable development goals (United Nations,
2024). In Zimbabwe the adoption and growth of green accounting are facing problems of lack of
Comprehensive Environmental Accounting, Inadequate Data Collection and Reporting, Policy
and Regulatory Challenges, Limited Awareness, and Capacity Building.

Zimbabwe lacks a robust system for integrating environmental costs and benefits into its national
accounts. Traditional accounting methods predominantly focus on financial metrics, overlooking
the environmental impact of economic activities(Wiredu, Osei Agyemang, and Agbadzidah
2023). There are insufficient data collection mechanisms that hinder accurate assessment of
environmental impacts. Without reliable data, it is challenging to quantify the effects of
economic activities on natural resources, pollution, and ecosystem health(Wiredu et al. 2023).
Existing policies do not explicitly mandate the adoption of green accounting practices.
Zimbabwe’s corporate regulatory frameworks often prioritize economic growth over
environmental considerations which hinders the adoption of green accounting by many firms.
Many stakeholders, including businesses, policymakers, and financial institutions, lack
awareness of the benefits of green accounting (Chimwamurombe & Gona, 2022). There is a
growing need for Capacity-building efforts which are essential to enhance understanding and
implementation(Wiredu et al. 2023).

Therefore, it became a necessity to account for, measure, and evaluate environmental impacts
and sustainable development on investments in organizations (Chirisi, et al., 2021). This presents
an insurmountable challenge for an emerging economy such as Zimbabwe’s which has many of
its companies participating in the local and global financial market where many participants are
adopting green accounting when they publish their financial statements hence the present study
which aims to find out whether adoption of environmental accounting is effective for improving
sustainability for Zimbabwe’s economy (Ncube, Ngwenya, & Muleya, 2023). These goals should
enable users of accounting information to make decisions that are economically and
environmentally sound. (United Nations, 2024)

Objectives of the study

Main Objective

To assess the effectiveness of green accounting in promoting sustainable development in

Zimbabwe.

Objectives

To examine the relationship between green accounting and sustainable development

To analyze the environmental benefits of implementing green accounting practices in Zimbabwe.

Identify barriers to effective green accounting implementation.

Propose policy recommendations to bridge the gap between economic growth and environmental
stewardship.

Highlight the role of technological advancements in advancing sustainable development

Research Questions

Main question

How effective is green accounting in Zimbabwe’s sustainable development?

Research questions

How do green accounting and an economy’s sustainable development relate?

How does the environment benefit from implementing green accounting?

 What is hindering the fast adoption of green accounting

Which policies can bridge the gap between economic growth and environmental
stewardship?

What is the role of technological advancements in advancing sustainable development?

Research Hypothesis

H1: Implementing Green Accounting Practices Positively Correlates with Achieving

Sustainable Development Goals.

H2: Adopting Green Accounting Practices in Zimbabwe Leads to Improved

Environmental Outcomes.

H3: The adoption of green accounting by businesses contributes to national and global
sustainability targets, achieving broader macroeconomic goals.

H4: Several Barriers Hinder the Successful Implementation of Green Accounting.

H5: Effective Policies Align Economic Growth with Environmental Stewardship

1.6 Significance of the study

The study examines the implications of green accounting for sustainability in Zimbabwe. The
study is of utmost importance to stakeholders in the Zimbabwean financial sector such as the
higher education fraternity, policymakers, and financial journalists. It is also important because it
can help promote sustainable development, protect the environment, and achieve economic and
social development.

1.6.1 Academic Significance

The study will be completed in part to fulfill the criteria for a Bachelor of Science Honors degree
in Accountancy. It will also give the researcher research skills for use in future academic and
scientific investigations and improve their knowledge of accounting. Additionally, it will use the
expertise that has been accumulated over the years at Chinhoyi University of Technology to
shape useful solutions that are appropriate for the sector. The study aims to provide further
insights into the mechanisms of sustainable development, how they may be used to improve
decision-making, and how they affect the environment and the economy both locally and
globally, as there are currently few verified findings on green accounting

1.6.2 Policy Makers

The degree to which implementing green accounting can improve company responsibility and
reporting must be thoroughly understood by policymakers. The goal of the research study is to
increase interest in and awareness of green accounting and its impact on sustainable
development, as there is currently little literature on the subject in Zimbabwe. It also aims to
assist current policymakers in adopting environmental accounting and in refining their existing
policies to better fit the needs of sustainable development in Zimbabwe. Furthermore, stock
exchanges, investors, and regulators around the world are coming to acknowledge and support
green accounting. Adopting green accounting practices can help businesses comply with
reporting regulations and draw in investors who respect sustainability and long-term returns.

1.6.3 Environmental degradation

Zimbabwe is facing significant environmental challenges such as deforestation, soil erosion, and
water pollution. Green accounting can help in tracking the environmental costs of economic
activities and promote sustainable development

1.6.4 Economic development

Zimbabwe is a developing country that is striving to achieve economic growth and development.
Green accounting can help in identifying the economic benefits of sustainable development and
promote the adoption of environmentally friendly practices
1.6.5 Social development

Sustainable development is not only about economic and environmental factors but also social
factors. Green accounting can help in identifying the social costs and benefits of economic
activities and promote social development

1.7 Delimitations of the study

The viability of implementing green accounting in Zimbabwe will be the sole focus of the
researcher's work, with the corporate world's perceptions of this field of study being perceived as
a hindrance to sustainable development.

The listed companies in Zimbabwe will serve as the case study for the research. Participants in
well-known Zimbabwe-listed firms will be the sole group included in the study. By concentrating
on the listed companies, in-depth research can be conducted.

The focus of the researcher will be mostly on green accounting and sustainable development,
with less emphasis on other frameworks like standard economic accounting. Additionally, the
study will concentrate on occurrences that occurred ten years ago or less. This enables the
research findings to focus on pertinent aspects instead of factors that have already been resolved.
According to Simon (2011), defining a research study's boundaries helps to make clear the
requirements for study participants, the study's geographic scope, and the organizations or
professions that are involved.

1.7 Limitations of the study

In carrying out the research study, the researcher might encounter several limitations in terms of
time, finance, data collection challenges, and inaccurate responses.

1.7.1 Time constraints

Due to time constraints, the researcher might be unable to complete the study because she must
also complete her courses and assignments. Nonetheless, the researcher will schedule and assign
her tasks appropriately to ensure she completes them on time. The study tools will be distributed
ahead of schedule to provide participants enough time to complete the questionnaire and
interview instructions.
1.7.2Financial constraints

The majority of listed companies' offices are in the capital of Zimbabwe, where the researcher
must travel for the research. Printing and internet costs will also be incurred, especially when on
vacation. The researcher's ability to do this is limited by her funding. The researcher will need to
make sacrifices and use the available funding. To save on travel costs, some interview
instructions and questionnaires will be given electronically.

1.7.3 Withholding information

If the respondents believe that the subject of the study is delicate, they may decide not to provide
information, which could reduce the validity of the findings. To get around this, the researcher
will make it clear to participants that the findings are intended for academic use and that their
thoughts will be treated with the highest confidentiality. Additionally, the researcher will let
participants know that their identities are optional for the study instruments and that they consent
to have information from

1.7.4 Inaccurate responses.

Many respondents might not have given an honest response because of their lack of knowledge
about green accounting. Professionals with a background in sustainable development or green
accounting are not the exclusive audience for this study. Because these skilled individuals are
few in number and difficult to reach. To mitigate this issue, the researcher will acquire high-
quality data by using the responses of other stakeholders like environmentalists and economists
as a stand-in for the views of the larger sample.

1.8 Assumptions of the study

The investigation will be conducted with adequate financial and material resources
available to the researcher. This will lessen the need to put undue pressure on the results
and conclusions of the research and help meet deadlines for submitting the draft and final
project.
 The responders will provide honest and transparent answers to the questionnaire. This
helps to improve the validity, relevance, and reliability of the study findings.

Respondents value integrated reporting and are informed about it. This will help in
choosing the right sample and sampling strategy to use in the study to meet the desired
goals.

The sample's inclusion criterion is suitable, guaranteeing that all of the respondents have
encountered the same or a related occurrence under investigation. This contributes to
confirming that the sample's opinions accurately reflect those of the entire target
population.

1.9 Definition of terms

1.9.1 Green Accounting

A subfield of accounting known as "green accounting" aims to account for environmental costs
when determining an organization's operational earnings. In terms of sustainable development, it
takes into consideration not only the value of natural resources but also the cost of pollution and
the loss of natural features. It also places more emphasis on the quality of economic growth
(Hossain, 2021).

1.9.2 Sustainable development

Sustainable development refers to the revenue growth that a company can achieve within its
financial and operational constraints (Patel et al., 2020). Enhancing one or more of the three
primary strategy areas of market development, long-term stakeholder support, and financial
performance contributions should be the focus of sustainable development.

1.10 Chapter Summary

This chapter defined sustainable development, and discussed how green accounting has evolved
historically, why it is important, and why sustainable development must flourish in emerging and
developing nations alike, including Zimbabwe. It continued by stating that the study's
importance lay in spreading knowledge of green accounting and motivating stakeholders and
policymakers to adhere to the green accounting framework. The study's boundaries about the
population of interest, the time frame, and theoretical and conceptual boundaries were also
covered in this chapter. The study's shortcomings were identified as finances, time, and bias.