Green Target Costing As A Strategy To Improve Economic Efficiency And Enhance The Environmental Sustainability Of Economic Entities

Abstract

The aim of this research is to identify the role that the application of Green Target Costing (GTC) can play in enhancing economic efficiency and environmental sustainability within Iraqi industrial entities. The research problem lies in the challenges these entities face in balancing economic efficiency with environmental sustainability, due to the limited adoption of green accounting approaches and the lack of integration of environmental dimensions into the early stages of cost planning.

The study employed a descriptive-analytical methodology, relying on data from the Battery Plant of the General Company for Automotive and Equipment Industry. It analyzed the contribution of reinvesting the financial surplus generated from the application of GTC into projects such as lithium battery production and solar panel manufacturing, comparing the outcomes of implementation with the current situation.

The findings revealed that integrating environmental dimensions into target costing contributes to reducing operational costs and improving economic efficiency. The most significant conclusion of the study is that GTC represents an effective tool for achieving both environmental sustainability and economic efficiency by reducing resource consumption and enhancing productivity. Accordingly, the research recommends expanding the application of green target costing in Iraqi industrial entities, given its role in strengthening their ability to address the dual challenge of environmental preservation and cost reduction in production.