What is Environmental Accounting?
Environmental costs are one of the many different types of costs businesses incur as they provide goods and services to their customers.
Environmental performance is one of the many important measures of business success.
Environmental costs and performance are examined through the process of environmental accounting.
What can Environmental Accounting support?
1) National accounting
2) Financial Accounting
3) or Internal Business Managerial Accounting
Environmental Accounting can refer to both a businesses’ private bottom line costs as well as societal costs (costs to individutals, society, and the environment).
Why Do Environmental Accounting?
1. Environmental costs may be overlooked in overhead costs
2. Environmental costs may be reduced or eliminated through greener process technology
3. Environmental costs may be offset by generating revenue from for sale of waste by-products, transferable pollution allowances, or licensing of clean technologies.
4. Improved environmental performance and significant benefits to human health can be the result of better management of environmental costs.
5. Understanding environmental costs can lead to the promotion of more accurate costing and pricing and the design of preferable processes, products, and future services.
6. Environmentally preferable processes can provide a competitive advantage with customers.
7. Environmental costs and performance can support an overall environmental management system which will soon be necessary for companies involved in international trade due to ISO 14001 standards.
Source:https://www.epa.gov/sites/default/files/2014-01/documents/busmgt.pdf
For a comprehensive discussion on Environmental Accounting, the source document may be referenced.
New Directions In the World Of Accounting!
An interesting conversation about progress related to Environmental Accounting can be retrieved from the Nature of the Balance Sheet, Martin Stuchtey, The Landbanking Group.