Forestry Managers' Perceptions of the Feasibility of Incorporating Non-market Value Estimates into Financial Environmental Reporting

There is currently considerable interest in environmental economic valuation methods because of their importance in policy development and litigious issues. Several accountants have recently advocated these valuation techniques within accounting and reporting frameworks. Environmental accounting can incorporate financially quantified environmental externalities into conventional reporting systems, so that financial statements communicate the commercial and environmental performance of an organisation to its stakeholders to allow more fully-informed decisions. This paper examines the feasibility of developing a financial environmental reporting system for an Australian public sector forestry organization. Data collected with the assistance of the organization were analysed using descriptive and inferential coding. Reactions of forest managers to the introduction of environmental reporting, and their implementation experience, were examined. Potential barriers to the reporting system include a lack of funding, internal resistance to economic valuations due at least in part to low knowledge levels in relation to non-market valuation methods, stakeholder resistance, and the absence of recognised environmental indices against which to report. Potential benefits include capacity to report on sustainability of forest management, and information with which to negotiate settlements with powerful stakeholders and to seek funding for public-good components of operations.