Environmental Accounting and its Impact on Organizational Performance: A Case Study of Shell Petroleum Development Company, Oman

This study explores the impact of environmental accounting on organizational performance through a case study of Shell Petroleum Development Company in Oman. It discusses the conceptual framework of environmental accounting, including stakeholder theory, legitimacy theory, and positive accounting theory, and examines the objectives, benefits, and basic elements of environmental accounting practices. The study also analyzes the impact of environmental accounting on organizational performance using cash and accrual accounting methods.

Running head: ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON
ORGANIZATIONAL PERFORMANCE
Environmental Accounting and its Impact on Organizational Performance: (A Case Study of
Shell Petroleum Development Company, Oman).
Name of the Student:
Name of the University:
Author’s Note:

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Table of Contents
Chapter 2: Literature Review...........................................................................................................3
2.1 Conceptual Framework..........................................................................................................3
2.1.1 Stakeholder Theory.........................................................................................................3
2.1.2 Legitimacy Theory..........................................................................................................4
2.1.3 Positive Accounting Theory...........................................................................................5
2.2 Concept of Environmental Accounting.................................................................................6
2.2.1 Objectives of Environmental Accounting......................................................................7
2.2.2 Benefits of Environmental Accounting..........................................................................7
2.2.3 Basic Elements of Environmental Accounting...............................................................8
2.3 Environmental Accounting Practices....................................................................................9
2.4 Environmental accounting and organizational performance...............................................10
2.4.1 Cash Accounting...........................................................................................................10
2.4.2 Accrual Accounting......................................................................................................10
2.5 Environmental Information and their Users........................................................................11
2.6 Summary of the Literature...................................................................................................14
Chapter 4: Data Analysis and Discussion......................................................................................16
4.1 Introduction..........................................................................................................................16
4.2 Results and Findings............................................................................................................17
4.3 Discussion............................................................................................................................30

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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4.4 Summary..............................................................................................................................31
Chapter 5: Conclusion, Recommendation and Future Work.........................................................33
5.1 Introduction..........................................................................................................................33
5.2 Summary of the Findings.....................................................................................................33
5.3 Conclusion...........................................................................................................................33
5.4 Recommendations................................................................................................................35
5.5 Limitations...........................................................................................................................36
5.6 Future Research...................................................................................................................36
Reference List................................................................................................................................37
Bibliography..................................................................................................................................41

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Chapter 2: Literature Review
2.1 Conceptual Framework
The thesis that has been taken into consideration has the intention of assessing the
conceptual model of environment accounting which is reliant in the social theories related to
accounting. The theories that would be explained in this thesis are inclusive of the stakeholder,
positive accounting and legitimacy theories. The existence of a company in the long run is
dependent on the approval and the support of stakeholders (Saeidi et al. 2015). In accordance to
the legitimacy theory, the companies look to create congruence among the social values that are
implied or related to their operations and the rules of acceptable attitude in the bigger system
within which the operations are a part.
2.1.1 Stakeholder Theory
The simple proposition of the theory stakeholder is that the success of the companies is
reliant in the effectiveness of the management in association to all the relationships which the
companies possesses with the stakeholders and this is a term incorporated by Cormier and
Magnan (2015) in order to explain the groups without the assistance of whom the companies
would stop to survive.
In the enhancement of the stakeholder theory, Flower (2015), implements the concepts of
stakeholders in to the segments like a business policy and planning framework and a corporate
social responsibility framework of the management of the stakeholder. In the initial framework
the stakeholder assessment concentrates on the evaluation and the development of the approval
of the corporate strategy related decisions, whose assistance is essential for the continued
services of the companies.

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The second framework, corporate assessment and planning extends to add in the external
factors which may be promotional to the companies. This framework assists the managers and
the accountants to make use of the strategic plans that would sustainable to changes in the social
desires of the non-conventional group of stakeholders.
The theory of the stakeholders has led to the rise in the extent of awareness related to
environment and thereby generates the requirement for the companies to develop their corporate
planning and the bring in the non-conventional stakeholders that are inclusive of the regulatory
groups in order to implement the transforming demands of the society.
2.1.2 Legitimacy Theory
This a perception and the estimation that is generalised in nature that looks into the
actions of a group that are effective, precise, desirable and suitable within some communally
constructed process of norms, explanations and values.
This theory recommends that a company may one of the four steps with respect to their
legitimacy. The development of legitimacy, which explains the initial phase of the development
of the companies and looks to revolve around the competence issues, specifically that are
financial in nature, but the companies need to conscious of the socially developed standards
related to quality and the desirability and accordingly act with respect to the professionalism
standards that are accepted (Otley 2016).
The development of legitimacy is the point where the companies enter new and improved
markets and alters the way its associates to their current market. This may lead to the
development of desires to develop their legitimacy, which is essential to be intense and proactive

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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as the management looks to gain the trust and the confidence of the probable constituents
(Watson 2015).
The protection of legitimacy takes place when the legitimacy is at risk by any kind of
internal and external incidents and hence is in need of defence. The activities of legitimacy look
to be reactive and intense as the management looks to counter the risks.
2.1.3 Positive Accounting Theory
This theory explains the fact that why the companies undertake disclosures related to the
society. The work that is undertaken by Epstein, Buhovac and Yuthas (2016) explains that
positive accounting theory have directly looked to create evidence for the political expense of the
hypothesis as a definition for the social disclosures of the companies.
Chen et al. (2014) explained that there have been several empirical researches that have
explained that size of the firm and the disclosures have shown strong relationships and string
relationship is present among the type of the industry and the disclosures. It is seen that
disclosure and size of the firm have indicated the best level of relationship. These results have
supported the theory of positive accounting.

6
Stakeholder Theory
Legitimacy
Theory
Positive
Accounting
Theory
Environmental
Accounting
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Figure: Conceptual Framework
(Source: As Created By the Author)
2.2 Concept of Environmental Accounting
There have been substantial resources and efforts that have been deplored in order to
make sure that the natural atmosphere in not looked upon as something that can be exploited
without any limit. The process of accounting has a fundamental role to play in explaining the
environmental accountabilities for the various entities which are commercial, industrial services
and at all extents whether it is macro or micro. Therefore, accounting has stressed on the issue
for attaining the new aims like the assessment and the computation of the actual and the probable
environmental effects of the companies. These new aims and goals are of greater significance as
they assist several users to undertake various decisions related to development that are
economically and environmentally effective and precise.

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2.2.1 Objectives of Environmental Accounting
Qiu, Shaukat and Tharyan (2016) explained that environmental accounting is essential to
satisfy a lot of desires from several stakeholders. Environmental accounting assists in
discharging the accountability of the companies and raises the transparency of the environment
and assists in the negotiation of the concepts related to environment and ascertains the
relationship of the companies with the community in general and the pressures from the
environmental groups specifically. This assists the companies looking to manage strategically
developing and new problems with their stakeholders.
Due to the movement related to ethical investment, the investors who are ethical in nature
ask the organizations to eco-friendly. Hence, by maintaining the friendly image, the companies
may be competent in raising capital from the groups and individuals who are eco-friendly.
With the construction of the environment disclosure, companies express their
commitments in the incorporation and transformations and therefore look to be receptive to new
factors. The organizations associated with environmentally unfriendly businesses had strong
public sentiments (Dane and Brummel 2014). There exists an effective environmental who are
against these businesses. Green documenting may be utilised to fight public responses that are
potentially negative. By assessing the enlightened approach related to environmental accounting,
organizations may enhance their image of being aware towards the external world and this can
be looked upon as the organizations that are enlightened.
2.2.2 Benefits of Environmental Accounting
The profit of gaining an understanding of the environmental accounting initiatives is that
the recognition and enhanced consciousness of environment associated expenses often gives the

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benefit of discovering ways to mitigate or restrict these expenses, and even concentrating on
developing the environmental performance (Soto-Acosta, Popa and Palacios-Marqués 2016).
Lonial and Carter (2015) recognised that, more explicitly, environmental accounting is a
significant technique for addressing environmental problems that are extensively on top of the
agenda of the management, giving out effective data to inform environmental and decision-
making of the financial managers, and precisely explaining the environmental commitment
towards the stakeholders.
2.2.3 Basic Elements of Environmental Accounting
Environmental accounting is based on the explanation of the objectives of having a
relationship with environmental accounting. The objectives need to be in line to policies for
environmental deliberations prepared in the business operations of the organizations and other
organizations, and with their environmental aims and environmental plans of action (Molina-
Azorín et al. 2015). The following aspects with respect to the implementation of environmental
accounting are essential.
In the fundamental way, the target period taken into consideration should be similar to
the period covered by the environmental statements of the companies. Basically, the data related
to the financial accounting of the organizations, environmental performance and environmental
accounting requires being coordinated to match business of the firm within that accounting year.
The scope of calculations needs to be similar in accordance to the environmental document of
the company. Basically, it needs to cover the business group (Fraj, Matute and Melero 2015).
Nevertheless, if the problems generate as an outcome of undertaking the evaluations for the
business entity in general, the calculations shall be prepared within a level that would cover the

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whole firm and its business locations, with chronological calculations in accordance to the real
activities of the firm or other companies that is being desired.
2.3 Environmental Accounting Practices
The process of environmental accounting males use of two processes and they are
monetary and physical approach. The physical approach addresses that a precise guides need to
be constructed that would address the resources that are available within the country that is
classified in accordance to their scenario and their uses. By relying on this process, the
environmental activities are represented in the physical aspects, the present balance of the
resources and the deductions and the additions from the resource. There is no value related to
money that is assigned in accordance to this process. The monetary process developed because
of the fact that the physical approach is incompetent in fulfilling the demands of the
environmental accounting (Eccles, Ioannou and Serafeim 2014). The physical approach is vital
in order to receive the physical data about the resources which assists in constructing the
environment based statistics and is looked upon as the initial step towards the monetary
approach. In spite of the issues related with the monetary approach, it attained a lot of interest as
these kinds of information assists in gaining an understanding of the loss and profits that are
related with the environment based activities to receive economic indicator that is adjusted by the
environmental aspects.

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2.4 Environmental accounting and organizational performance
2.4.1 Cash Accounting
The environmental problems that have an effect on the financial reports are constructed
on the basis of cash in accounting. Conversely, the impacts of the financial reports are very much
restricted than under the financial reports constructed under the basis of accrual.
Chen et al. (2015) explained that the environmental issues that can have an effect on the
cash flows of an entity during the time of the period of reporting. Chen et al. (2015) even
explained that there can be an effect where the compliance documentation is added in
government financial statements.
2.4.2 Accrual Accounting
The issues related to the environment can have an effect in the financial reports that are
constructed on an accrual manner in several processes. There are international standards of
accounting, which explains the essential principles for the measurement, identification and the
disclosure of the environmental facts within the financial statements. The incorporation of the
environmental regulations and laws may be associated with the responsibility to identify the
asset impairments and thereby need to report the carrying amount. The incompetency to stay in
compliance with the legal needs associated with the matter of environment like the disposal of
waste and emissions may need accrual of the works of remediation, legal expenses and
compensations. Liao, Luo and Tang (2015) recognised that if the companies are not able to
comply with the legal needs with respect to the control of the pollution, the companies may have
risk of facing a fine or penalty. It was even explained that some yearly operational cost are
environmental in nature.

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2.5 Environmental Information and their Users
The environmental information that is associated with the organizations is an aspect with
respect to attention of the parties who are interested can be segmented into two general aspects
and they are:
 Inputs that are induced environmentally on the economic process of the company
 Environmental components of the business activities that is inclusive of the services and
the products and the effects on the environment that is created by the organization.
The impacts that are induced by the environment on the economic process of an
organization are addressed in the monetary units and they are generally the financial information.
This is associated to all the effects during the past, present and cash flows of the future of the
organizations, on their financial scenario and the economic outcomes, which are created by the
organizational influence, on the financial scenario and the issues that are induced
environmentally on the financial effect and this segment of the information for instance has been
the data related to the capital expenses that is spent in relation with cleaner and better production,
on lines with the infringement of the law on the safeguarding of the environment and even on the
environmental liabilities (Ahi and Searcy 2015). The disclosure of the aspects related to the
value of the business activities, which is known to be the accounting system. However, the
process of accounting even constitutes of the information addressed in the physical units. In
order to assess the environmental behaviour of an organization, it is essential to have the data
related to the environmental aspects and the effects of the activities of the business in relation to
the services and the products in relation to the environment.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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The environmental elements are the impacts over the environment that is created by the
organizations are addressed in the physical units and these are information that is non-financial
in nature (Bernardo et al. 2015). It addresses the fact that this stresses on the data on the amount
of the materials and energies that are consumed, the types and the amount of manufactured
wastes etc.
The traditional process of accounting is unable to provide adequate information that
would be useful to the users in satisfying their desire for the information in order to assess the
environmental behaviour of an organization and their economic after effects. The traditional
accounting system is focused generally in bridging the needs of the information of the parties
who are interested, which is related to the economic performance of the organizations. There has
been an increase in the level of attention due to the rise in interested of the interested parties
towards the impacts that are induced environmentally on the economic process of the
environmental elements of the company and the environmental effects that is created by the
organizations (Cheng, Yang and Sheu 2014).
In accordance to the fact that the data related to the environmental elements and the
effects of the activities of the business, services and products over the environment needs to be
restricted for the ideal evaluation of the performance of the environment of the firm, a
requirement has been constructed in order to assess and document the environmental data that is
even known as the process of environmental accounting.
Fraj, Matute and Melero (2015) recognised that several interested parties are attracted
towards the environmental data. There are certain users who put their entire stress on the
economic outcomes with respect to the influences of the organization over the environment and

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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there are other parties who are actually interested on the environmental impacts and the
elements. The environmental elements of the organizations may essentially have an effect on the
economic outcomes of the firm and their financial scenario. The attention towards the economic
outcomes of the approach of the companies to the environment is given out not only by the
management of the companies, but attention is given by the other interested parties. The creditors
and the investors are generally interested and on the other hand, in case of the environmental
risks and the degree of the liabilities that comes from these kinds of risks.
In general, the owners are even interested in accordance to the environmental attitude of
the companies. The focus is given on the economic outcomes of the environmental attitude of the
firm and their effects towards the return on investments (Hřebíček et al. 2014). The other parties
who are interested like for instance the rival companies, government, suppliers and the customers
are worried about the protection of the environment even pays attention towards the procedures
that are undertaken by an organization in order to take care of the environment.
There are certain parties who are essentially interested in the effects of the business
activities, services and products on the environment (Li and Liu 2014). Hence, it is pertinent that
requirements in the area of the environmental data are very assorted. The job environment
accounting is the bridge in the demand for the information of all the key parties.
It is therefore seen that environment accounting hence needs to be designed so that it
would be able to provide information that would assist the users to evaluate the environmental
attitude of the firm and their economic attitude and hence parts of the process are both data in
monetary value and the other part has been information in the physical units (Melnyk et al.
2014). In addition, it is essential to make sure that the various kinds of information are in

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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demand for different users and therefore all these demands have to be filled. It even signifies the
fact that the idea and the conception of environmental accounting is reliant on the general
identification that has an influence on the development of the accounting process in the current
time period process, which tries to explain the fact that the business processing approaches and
units needs to be differentiated with respect to the users of the accounting data and in accordance
to the task of making decisions and in order to assist the same the data related to accounts are
utilised. Lonial and Carter (2015) explains that environmental information and their users have a
significant role to play with the help of which the companies are able to satisfy their stakeholders
and keep them satisfied and this in turn is helpful in the development of the overall activities of
the business.
2.6 Summary of the Literature
The literature review that has been constructed has looked to explain the process of
environmental accounting and how it has attained significance in the operational activities of the
business in the current time period. The literature has looked to create and show the relationship
that is present with environmental issues and the concepts of accounting. The literature has even
looked to explain the theories that are related to environmental accounting and how these
theories are considered by the companies during the time of taking care of the environmental
accounting processes. The concepts and the objectives of environmental accounting has even
been expressed in order to have a proper understanding of what environment accounting looks to
attain from the companies and how the maintenance of the same would be helpful for the
development of better operational activities of the business. The public responses opf
environment accounting has even been expressed with the help of which the companies can plan

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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their policies and create an eco-friendly image in order to maintain their market and attain
customer base.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Chapter 4: Data Analysis and Discussion
4.1 Introduction
The data assessment is done on the basis of the topic that is selected in this paper and the
entire process is completed with the help of the theories and models that are already available to
the researcher. The researcher has collected all the data with the help of the sources that are
secondary in nature and therefore has taken assistance of numerous articles and journals and
most importantly have gone through the internet website of Shell Petroleum in order to find out
the steps and the actions that have been undertaken by the company in accordance to looking to
the environmental aspect by the considering the process of environmental accounting. The
effectiveness of the evaluation of the data ascertains the level of quality the thesis discloses. The
completion of the analysis leads to the outcome of the paper and the validity of the outcome can
be understood with the help of the sources and the tools that have been used for the intention of
assessing the data. The topic in this paper looks to ascertain the impact of environmental
accounting on the performance of Shell Petroleum and in order to understand the environmental
accounting processes that have been undertaken by the company, an analysis of their website in
accordance to the sustainability section is done where the company has disclosed sufficient data
in accordance to the measures and the steps they have taken in order to look in to environment
during their extraction and manufacturing activities. the company has their job related non-
renewable energies and materials and therefore it has become a significant part on the aspect of
the company in order to take care of these areas.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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4.2 Results and Findings
Emission of Greenhouse gas
Shell Sustainability Report
Greenhouse gas
emissions
(GHGs)
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Direct total
GHGs (million
tonnes CO2
equivalent) (1) 75 69 76 74 72 73 76 72 70 73
Indirect total
GHGs (million
tonnes CO2
equivalent) (2)
n/
c 9 9 10 9 10 10 9 11 12
Table 1: Greenhouse Gas Emission
(Source: Shell.com 2018)
The direct emissions of the greenhouse gases that has taken place over the past ten years
has been analysed and the results explain that from 2008, there has been a fall in emissions in
2009. Significantly, there again there has been a rise in the year 2010 in accordance to 2009 and
the rate cane to 76. Thereafter the rate of emissions has fluctuated as the value has declined or
has remained at 76. In the last year, the emission rate reduced by some margin as the value was
73. The results have indicative of the fact that the company did not have effective measures and
actions plans with the help of which they would be able to reduce the level of emissions that are
taking place due to their operational activities.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Figure 1: Greenhouse gas emissions from 2008 to 2017
(Source: Shell.com 2018)
Carbon dioxide
Shell Sustainability Report
Carbon dioxide
(CO2)
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Carbon dioxide
(CO2) (million
tonnes) 72 66 72 71 69 71 73 68 67 70
Table 2: Carbon dioxide
(Source: Shell.com 2018)

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Carbon dioxide is one of the general pollutants that are even exhaled by human beings
and animals and therefore the presence of this gas is in abundance. The report that has been
published by Shell has explained that in the year 2008, the rate of carbon dioxide emissions has
been 72. In the next year the figure came down to 66. In 2010, however, rate had a rise and in the
next year fell by 1 unit. The next few years have indicated that there have been ups and downs in
the rate of emissions and in the last year there has been an observation that the emission
increased with respect to 2016 and the figure came to 70. This has prompted that there has been a
rise in the emission of carbon dioxide.
Figure 2: Carbon dioxide from 2008 to 2017
(Source: Shell.com 2018)

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Methane
Shell Sustainability Report
Methane (CH4)
(9)
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Methane (CH4)
(thousand tonnes)
12
6
12
7
12
8
13
3 93
12
0
12
6
13
2
13
8
12
3
Table 3: Methane
(Source: Shell.com 2018)
The methane discharge has been relatively high for the company and the overall
observation has indicated that there has not been significant rise and fall in the emission of
methane as from the year 2008, the emission rate has been around 120 and 138 except for the
year 2012, when the discharge level was 93. In the last year the rate has been 123 and the overall
analysis signifies the fact that the company has been incompetent in managing the reduction in
the emission of methane even though the rate of emission has been high in accordance to the
other pollutants.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Figure 3: Methane from 2008 to 2017
(Source: Shell.com 2018)
Nitrous Oxide
Shell Sustainability Report
Nitrous oxide
(N2O)
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Nitrous oxide
(N2O) (thousand
tonnes) 2 2 2 1 1 1 1 1 1 1
Table 4: Nitrous Oxide
(Source: Shell.com 2018)

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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The rate of emission of nitrous oxide explains that the discharge has been very low in
comparison to the other pollutants that are emitted during the manufacturing process. It is seen
that in the years 2008, 2009 and 2010 the value has been 2 and thereafter till the last year the
value has been 1. The figures explain that the company has been able to reduce the emission
even though it is seen that they have not been able to reduce the entire emission.
Figure 4: Nitrous Oxide from 2008 to 2017
(Source: Shell.com 2018)
Hydro fluorocarbons
Shell Sustainability Report
Hydrofluo
rocarbons
(HFCs)
2
0
0
2
0
0
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1

23
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
8 9 0 1 2 3 4 5 6 7
Hydrofluor
ocarbons
(HFCs)
(tonnes)
2
3
2
5
2
3
2
2
2
3
1
7
1
6
1
8
2
1
2
3
Table 5: Hydro fluorocarbons
(Source: Shell.com 2018)
The emission that has been observed for HFCs has been significant as it is seen that the
discharge has been 23 in the year 2008 and had a rise to 25 in the next year. There has been rise
and fall in the discharge of HFCs in the following years and the company has not been able to
take actions and measures with the help of which the emissions could have been controlled.
However, in the year 2017, the rate of emission has increased and thereby explaining the fact that
the current measures and the policies that have been used by the company is not adequate in
order to reduce the level of emission of these kinds of pollutants within the environment. The
company needs to construct new and improved plans with the help of which these emissions can
be reduced in an effective manner.

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ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
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Figure 5: Hydro fluorocarbons from 2008 to 2017
(Source: Shell.com 2018)
Energy Intensity- Upstream
Shell Sustainability Report
Energy
intensity –
upstream
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
Upstream excl.
oil sands, LNG
and GTL
(gigajoules per
tonne
production) (6)
0.
7
4
0.
7
6
0.
7
4
0.
7
5
0.
8
3
0.
8
9
0.
8
7
0.
8
3
1.
0
2
1.
0
5
Table 6: Energy Intensity- Upstream

25
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
(Source: Shell.com 2018)
The energy intensity refers to the amount of energy lost during the extraction process that
has been undertaken by Shell Company. The figures have indicated the fact that in the year 2008
the amount has been low. However, with the advent of time and the passing of the years the level
has increased and in the last year the value reached to 1.05. The results have explained that the
company has not been able to taking actions in order to reduce the amount of energy lost during
the extraction of the non-renewable minerals and oils.
Figure 6: Energy Intensity- Upstream from 2008 to 2017
(Source: Shell.com 2018)
Acid gas and VOC
Shell Sustainability Report
Acid gases and
VOCs

26
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Sulphur oxides
(SOx) (thousand
tonnes SO2)
(thousand tonnes)
17
5
14
1
13
9
13
6
11
3 99 97 88 83 81
Nitrogen oxides
(NOx) (thousand
tonnes NO2)
(thousand tonnes)
15
0
14
2
15
9
14
6
14
7
15
6
14
6
10
4
12
2
10
7
Volatile organic
compounds
(VOCs)
(thousand tonnes)
13
0
12
6
14
7
12
9 89 89
15
1
12
5
14
6 95
Table 7: Acid gas and VOC
(Source: Shell.com 2018)
The table has looked to address the various kinds of acid and VOCs that have been
depleted by the company. The amount of discharge of Sulphur dioxide from the year 2008 to the
year 2017 has reduced by a significant margin because of the fact that in the year 2008 the value
had been 175, but in 2017, the same value came down to 81.
In the same way the discharge of nitrogen oxides have reduced as well as by looking at
the table, it can very well be said that emission in the year 2008 was 150 and the same value has
declined to 107 in the last year.
By looking into the volatile organic compound emission, it is seen that the value in 2008
was 130 but on the other hand the same value in the year 2017 has been 95.
By looking at the rate of emission of the pollutants that have been discussed currently,
one can say that the company with the help of their plans and policies have been competent

27
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
enough in order to reduce the emission of these gases and volatile compound and thereby
reducing pollution within the environment.
Figure 7: Acid gas and VOC from 2008 to 2017
(Source: Shell.com 2018)
Ozone Depleting Emissions
Shell Sustainability Report
Ozone-
depleting
emissions
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
CFCs/halons/
trichloroethane
(tonnes)
1.
4
0.
4
0.
0
0.
0
0.
0
0.
0
0.
0
0.
0
0.
0
0.
0
Hydrochlorofluo
rocarbons
(HCFCs)
(tonnes) 26 24 21 12 8 8 6 8 8 7

28
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Table 8: Ozone Depleting Emissions
(Source: Shell.com 2018)
The table has been looking to explain the emission of CFCs and HCFCs that are
discharged from the extraction and the manufacturing process of the company. The figures have
indicated the fact that the company has been competent enough in eliminating the discharge of
CFCs as the value came down to zero in the year 2010 and thereafter there has not been any
discharge of CFCs. However, the discharge of HCFCs has still been existent as it is seen that the
value in the year 2008 has been 26 but with the help of the tools and techniques that have been
used for the purpose of reducing the discharge, the emission rate has fallen to 7 in the last year.
The tables have therefore explained that the discharge of CFCs and HCFCs have reduced
drastically.
Figure 8: Ozone Depleting Emissions from 2008 to 2017
(Source: Shell.com 2018)

29
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Oil effluents in the surface environment
Shell Sustainability Report
Oil in
effluents to
surface
environment
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
Oil in effluents
to surface
environment
(thousand
tonnes) (17)
1.
7
1.
5
1.
6
1.
3
1.
0
1.
0
0.
9
1.
0
1.
0
1.
2
Table 9: Oil effluents in the surface environment
(Source: Shell.com 2018)
The oil in effluents to the surface environment has expressed the fact that in the year
2008, the value has been 1.7 and with the advent of time the company with the help of their
measures have been able to reduce the level of oil in effluents on the surface environment.
However, the results have indicated the fact that there has been a rise in the rate of emission
because of the fact that the emission has increased from 1 to 1.2 in the 2017 in accordance to
2016.

30
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Figure 9: Oil effluents in the surface environment from 2008 to 2017
(Source: Shell.com 2018)
4.3 Discussion
The analysis of the data in accordance to the emissions that have an impact on the
environment have explained the fact that there has been a rise in the level of discharge for some
of the pollutants and on the other hand the other there have been certain pollutants that have
indicated that there has been significant amount fall and decline in the discharge because of the
measures and the policies that have been undertaken by the company.
The results explain that in case of the vital pollutants the company has not been able to
undertake proper actions in order to reduce the discharge but the company has been able to
reduce the discharge of some of the less significant pollutants from the atmosphere. Hence,
effective and better measures have to be taken by the company in order to reduce their level of

31
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
emission and hence better focus on environmental accounting should be given in order to reduce
the extent of pressure given on the environment.
The results that have been obtained can be compared with the theories that have been
explained in the literature review and it is seen that by looking into the aspects in relation to
which data analysis is undertaken it is seen that the results and the activities are in relation to the
stakeholder theory as well as the legitimacy theory. It is due to the fact that there has been a rise
in the interest within the company in order to safeguard the global environment with the help of
the use of several tools and techniques and this leads to the maintenance of the welfare of the
stakeholders and therefore the stakeholder theory is addressed. The actions and the plans
according to which the company has been functioning and has been taking care of the internal
and the external environment determines is based on the legitimacy theory. The aspect of
positive accounting theory is even observed within the company because of the fact that there
has been a rise in the extent of the accounting and transactions related to the environment based
activities as the company has been liberal in spending over the tools and the equipment that
would mitigate the extent of pollution from their production activities within the environment.
Therefore, the company has been maintaining their activities in relation to the explained theories
even though the effectiveness of their environment related services are not effective.
4.4 Summary
On a whole, the results have been able to signify the fact that the amount of focus that is
given by the company over the process of environmental accounting needs to be increased with
the help of which the company can reduce their level of discharge over the environment and
maintain an effective operational process with the help of which the company can successfully

32
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
function in the market as well as take care of the environment. On this aspect, the thesis can
make its forward to the next chapter of the paper.

33
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
Chapter 5: Conclusion, Recommendation and Future Work
5.1 Introduction
This is the final section of the paper where the paper would be concluded and the overall
outcome that is attained in the previous section of the paper would be highlighted and thereafter
environmental accounting and their impact on the performance of Shell can be understood. This
chapter would therefore address the overview of the findings, conclusion, recommendations,
limitations and future research.
5.2 Summary of the Findings
The data analysis which is completed in the previous chapter has been able to address the
aspects and the elements with the help of which environmental accounting and its impact over
Shell Company can be understood. The results indicate that the company has their own policies
and plans with the help of which they can take care of their environmental accounting process. It
is even seen that the activities in relation to environmental accounting for Shell Company is not
effective and adequate as there are still room for further developments in their environmental
accounting practices with the help of which better services and mitigation of the emission of the
pollutants within the environment can be reduced.
5.3 Conclusion
The research that was completed currently has the main purpose of assessing the
environmental impact on the organizational performance of Shell Company. The results that
have been attained with the help of the analysis of the data that has been gathered explains the
fact that the extent of environmental accounting requires further developments and
improvements with the help of which the companies would be able to operate in an effective

34
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
manner and the focus on the environment would be able to enhance the organizational
performance of the company. The development of environmental accounting would lead to the
company focusing on taking care of the environment and in this manner it is seen that the
company would be able to enhance their product quality as well. The literature that has been
constructed in accordance to this topic has further explained that the relative theories has to be
explained with the help of which better results can be obtained and accordingly all the aspects
related to environmental accounting would be explained in an explicit manner.
The outcome that has been attained from the previous chapter has been able to suggest
that the company has their own policies and regulations regarding environmental accounting and
the current scenario state that these plans and policies have not been effective enough. It is due to
the fact that emission of certain pollutants has not reduced. The company therefore needs to
increase their focus on environmental accounting and accordingly make amendments in their
plans with the help of which the company can improve their organizational performance in a
better way. It is seen that environmental accounting has a positive and direct impact on the
organizational performance and hence one can imply that better regulations and plans need to be
constructed with the help of which aspects related to environmental accounting can be improved
with the help of which focus on the environment can be given effective stress.
The results that have been obtained has been competent enough in addressing the
objectives of the research as it is seen that the paper the paper has been able to assess the
environmental accounting in Shell Petroleum and it is seen that the company has moderate level
of policies with the help of which the company has been operational recently.

35
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
The next objective that has been taken into consideration has been assessing the
environmental accounting practices within Shell and it is seen that the company has their own
environmental accounting policies and the results have signified the fact that the company needs
to improve their plans and policies with the help of which the organizational performance would
improve.
The results even indicate the fact that the environmental accounting have positive and
direct impact on the performance of the company and therefore extensive measures and
amendments are essential with the help of which the company can improve their business
activities. In this way recommendations can be constructed with the help of which the company
can improve their performance related to environmental accounting.
5.4 Recommendations
It is recommended that the Royal Shell assesses their current and existing plans related to
environmental accounting and by looking into the market can undertake extensive measures and
steps with the help of which changes and amendments can be incorporated and accordingly
environmental accounting process can be improved.
It is recommended that the company after the incorporation of the changes assesses the
practices from time to time with the help of which any defects and faults that would be identified
could be mitigated at the grass root level and accordingly the organizational performance would
improve. The tools and the techniques that are used in order to reduce the level of pollution
needs to be examined in order to examine its effectiveness and accordingly if changes are
required then it can be made in order to improve reduce the level of emission of the pollutants
that lower the impact on the environment. The incorporation of these changes can be helpful in

36
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
the development of the environmental accounting, which in a way can even improve the
organizational performance of Shell Development Company.
5.5 Limitations
This research has certain limitations and these limitations have restricted the researcher
from attaining better results. One of the significant limitation has been the availability of time as
it is seen that longer time period would be helpful in the development of a better research as
more information could have been collected in accordance to this topic with the help of which
precise and much more better results can be obtained. The other limitation has been that the
information that has been collected may contain certain manipulated data as the companies have
the intention of hiding certain data in order to maintain their image in the market.
5.6 Future Research
There is several scope of future research on this topic as with the passing of time there
would be several changes and these changes would hamper environmental accounting and
organizational performance as well. Therefore, future research on this topic with respect to Shell
Development Company can provide different results and this result can be evaluated and
compared with the current one in order to determine the changes and the developments that have
taken place.

37
ENVIRONMENTAL ACCOUNTING AND ITS IMPACT ON ORGANIZATIONAL
PERFORMANCE
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