FINANCIAL MANAGEMENT REGARDING ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE

Rares Mihai Nitu

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2023, vol. 17, issue 1, 184-198

Abstract: The new business models are oriented towards a green area, friendly to the environment and based on social responsibility and sustainable corporate governance. The impact of these measures seeks to protect the biological environment in which society lives, therefore the competitive economic environment. To make this possible, a set of rules is needed, which are either represented by legislative packages or by a specific fiscal system, applicable to the areas of interest. As a result, a financial incentive is needed to protect the environment. Taken as a whole, companies on the free market are competing through the lens of profit most of the time. The opportunity cost of ESG impact is this environment. A company's finances are mirrored with the benefits or costs generated by new ways of working. In order for organizations to be encouraged to change the paradigm, it is necessary that the lack of compliance with the legislation leads to a higher opportunity cost and therefore to higher costs. Companies are starting to pay more attention to the financial area on the ESG side. One of the main reasons is fines as a disincentive. On the other hand, as a set of rewards are tax exemptions to steer organizations towards the desired approach. Thus, the production of energy under its own regime or participation in specialized companies through financial contribution exempts the economic agent from certain taxes. Reducing waste by recovering packaging or quantities of plastic bootles exempts companies in the retail sector from fines. In order to be able to operate in this way on the market, it is necessary to change the traditional financial management. If new operating barriers appeared on the market, but applied uniformly, then the costs of operating on the market for economic agents did not become higher. The consequence is that of a greater monetary flow, a stronger financial circuit and the development of new market segments.

Keywords: environment; ESG; financial statement; tax. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:rom:mancon:v:17:y:2023:i:1:p:184-198

DOI: 10.24818/IMC/2023/01.18

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