Material flow cost accounting (MFCA) for the circular economy: An empirical study of the triadic relationship between MFCA, environmental performance, and the economic performance of Japanese companies.

The purpose of this study is to address the question of whether material flow cost accounting (MFCA) can contribute to the circular economy. Because MFCA is an environmental management accounting tool that simultaneously assesses company material and financial flows, it is expected to contribute to the circular economy by assisting companies to achieve both environmental and economic goals through resource efficiency. In short, the expected linkages between MFCA, company environmental and economic goals, and the circular economy are inputs, outputs, and outcomes. However, there is a lack of consensus regarding its potential, perhaps because of the scarcity of studies, with most being models and case studies without readily generalizable results. To address this gap, we analyze the triadic relationship between MFCA, environmental performance, and economic performance using a two-stage regression of data from Japanese listed companies. The main findings are as follows. Companies that implement MFCA more proactively are more likely to improve their environmental performance in terms of energy consumption, CO2 emissions, and waste produced. In turn, those that improve their environmental performance are also more likely to improve their productivity, while those that specifically improve environmental performance in terms of waste produced are also more likely to increase in profitability. Consequently, because MFCA can improve several aspects of environmental performance by saving resources, it can improve productivity by improving a range of environmental performance indicators. In particular, MFCA can improve company productivity and thereby profit, at least by reducing the amount of waste produced. This supports the view that MFCA is an effective tool to contribute to the circular economy.

Are corporate environmental activities to meet sustainable development goals (SDGs) simply greenwashing? An empirical study of environmental management control systems in Vietnamese companies from the stakeholder management perspective.

The purpose of this study is to address the criticism that corporate environmental activities to meet the UN sustainable development goals (SDGs) are simply greenwashing. To this end, we clarify whether and why corporate environmental activities are effective in achieving SDGs from the stakeholder management perspective. Using data on Vietnamese companies, we first empirically clarify the influence of stakeholder pressure on a company's environmental management control system (EMCS) implementation as a comprehensive approach to environmental activities and maintaining a proactive attitude toward the SDGs. Second, we examine the influence of EMCS implementation on environmental performance with or without proactive attitudes. The main findings are as follows. Companies implementing EMCSs normally improve their environmental performance, and pressure from final consumers and the government is a precondition for this accomplishment. However, if these companies incorporate the SDGs into their business targets, they can actually improve their environmental performance somewhat further, and government pressure plays an important role in this additional accomplishment. Therefore, corporate environmental activities to meet the SDGs work better than existing activities in Vietnam, refuting the criticism of greenwashing. Importantly, the Vietnamese government as a powerful stakeholder has proactively promoted domestic structural change to achieve the SDGs and has enacted many policies to encourage companies to be proactive in their environmental activities.