Rethinking Green Accounting Through Ethical Governance and Professional Ethics: A Critical Review of Environmental Disclosure Frameworks, Indicators, and Implementation Barriers (ESG)

This critical review rethinks green accounting through the lenses of ethical governance and professional ethics. Synthesising ۲۴ studies (۲۰۲۰–۲۰۲۶) and drawing on legitimacy, stakeholder, and institutional theories, three research questions were examined: (۱) the role of ethical governance and professional ethics in green accounting, (۲) the state and limitations of existing disclosure frameworks and indicators, and (۳) implementation barriers and potential remedies. Findings reveal that ethical governance (board level committees, linking compensation to outcome based indicators) and professional ethics (auditor scepticism, independence) are fundamental preconditions for effective green accounting yet both are systematically weakened in state dominated, weakly enforced economies such as Iran. Existing frameworks (GRI, SASB, TCFD) rely excessively on activity based indicators (e.g., number of policies) rather than outcome based ones (emissions intensity, material circularity rate) a pattern that enables greenwashing. Implementation barriers fall into three levels: institutional (weak enforcement, state dominance), organisational (assurance costs, greenwashing culture), and technical (data infrastructure). An integrated model is proposed with three principles: institutionalised ethical governance, verifiable outcome indicators, and assurance mechanisms driven by professional scepticism. This model has not been validated in Iran and requires field research. Practical implications include avoiding reliance on ESG ratings, pairing disclosure with investment, and starting with a small set of locally tailored indicators. Future research should focus on case studies of Iranian industrial firms and institutional adaptation of the proposed model.

Keywords:

green accounting , ESG , ethical governance , professional ethics , greenwashing , outcome based indicators