Environmental Accounting
Environmental Accounting
Environmental Accounting
Accounting
Accounting
Environmental accounting
Environmental accounting can be considered either a subset or superset of accounting proper. It aims to incorporate both economic and environmental information It can operate at the company level or at the level of the national economy.
EA is linked to the national accounts of countries that produce the estimates of Gross Domestic Product (GDP) Environmental Accounting is a growing field that identifies resource use, measures and communicates costs of a company or the national economy actual or potential impact on the environment.
Environmental Costs
Costs can include costs to clean up or remediate contaminated sites, environmental fines, penalties and taxes, purchase of pollution prevention technologies and waste management costs.
Environmental Accounting is often referred to as green accounting which incorporates environmental assets. It is a popular term for environment and natural resource accounting. Corporate environmental accounts have not yet found wide application of these concepts.
Ecological accounting
It measures the impact a company has on the environment, but in physical units rather than in monetary units. e.g Kilograms of waste produced It is closely related to sustainability.
Sustainability refers to The potential length of vital human ecological support systems, such as the planets climatic system, systems of agriculture, industry, forestry and fisheries and on the other hand increasing pressures by human communities, their consumption patterns in general, and their impact on and the various systems on which they depend, on the other hand.
Possible
revenue generation may offset environmental costs( e.g. transfer of pollution allowances) Improved environmental performance which may have a positive impact on human health and business success.
Corporate Environmental accounting can be further subdivided into: - Environmental Management Accounting - Environmental financial Accounting - Environmental Audit
Benefits of CEA
The identification and greater awareness of environmental related costs often provides the opportunity to find ways to reduce or avoid these costs. Also improving environmental performance. It is a valuable tool that enables business to respond to environmental challenges.
There are various defintions of environmental management accounting(EMA), but essentially it involves refining a managemnent accounting system so that it more tightly and rigorously accounts for environmental related costs.
Purpose of EMA
The intention is to identify environmental costs in order to enable more informed decisions about how these costs can be better managed and integrated into operational and strategic decision making.
Benefits of EMA
Identifying cost saving opportunities Better decisions regard to product mix and pricing Avoiding future costs through better investment decisions.
Environmental financial accounting is used to provide information needed by external stakeholders on a companys financial status. This type of accounting allows companies to prepare financial reports for investors, lenders and other interested parties.
Environmental Audit
An environmental audit can be modified according to the size and complexity of a business. A small business may concentrate on such things as paper usage and water and energy consumed, whereas a larger organisation may have a broader range of inputs and outputs to be measured.
An EA can give a company a much clearer understanding of its operations and impacts, and ultimately, provides a starting point for other environmental initiatives.
Is an accounting methodology that deals with energetics, ecology and economics at a global scale.
National environmental accounting is a macroeconomic measure that looks at the use of natural resources and the impacts of national policies on the environment.
SEEA
System of integrated environmental and ecological accounting(SEEA) It records the flow of raw materials(water, energy, minerals,wood etc) from the environment to the economy, the exchange of these materials within the economy and the returns of wastes and pollutants to the environment. SEEA is used by 49 countries around the world.
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