What is Environmental Accounting?

Environmental AccountingWhat is environmental accounting? It’s one of the most interesting and important accounting sub-fields out there. Do you care about how a company’s business practices affect the environment? Would you like to help various organizations figure out how much of their funds are spent on fixing up damage done to the environment or on purchasing more eco-friendly technologies? If you’re interested in pursuing a career in accounting and would like to specialize, give a lot of thought to environmental accounting.

What Is Environmental Accounting All About?

Environmental accounting is an accounting specialty that deals primarily with tracking the movement of money as it relates to the environment. It involves recording and communicating expenses incurred and profits earned relating to damage done to the environment, adapting new policies for reducing environmental harm, purchasing greener equipment for the workplace and more. A complete environmental accounting system includes both environmentally differentiated conventional accounting, which measures the monetary effects of the environment on organizations, and ecological accounting, which assesses how organizations affect the environment using physical measurements. According to Accounting Web Magazine, a primary goal of environmental accounting is to help organizations and governments budget and make better business decisions and policies.

The Various Subfields of Environmental Accounting

Environmental accounting can be studied on three major levels: the corporate level, the national level, and the global level. Corporate environmental accounting deals with the movement of money within organizations that results from the decisions that they make. For example, expenses may be incurred due to fees for failing to abide by certain environmental regulations, buying new materials for creating products that release a lower amount of hazardous by-product, or installing water-saving urinals in the company bathrooms. Profits may result from implementing solar technology in the office to power some percentage of the electrical needs, for example. National environmental accounting deals with similar issues, but on a national level. It typically involves the economics of obtaining raw materials, trading those materials, using those materials to produce other goods, and the pollution resulting from production. Global environmental accounting deals with the economics of energy production and many other topics and commonly uses measurements like GDP to report the numbers. Additionally, environmental accounting can be broken down into environmental management accounting, which deals with forming business strategies after looking at company financial records, and environmental financial accounting, which deals with supplying the external shareholders of a company with the financial information that they desire.

Why Should You Get Involved in Environmental Accounting

There are plenty of good reasons to make a career out of environmental accounting. Do you like working with numbers and statistics? Do you support finding more eco-friendly ways to do business? Do you want to see our country spend less money on fixing up environmental mishaps and a reduction in the national deficit? Do you want to help make meaningful changes in the world that affect the entire human population? Are you interested in how businesses work or accounting in general? If you answered “yes” to any of the above, you might find environmental accounting to be quite intriguing.

Related Resource: Business Administration

Environmental accounting deals with the relationship between environmental issues and the costs or profits that result from them on the corporate, national, and global levels. Accountants compile and analyze the numerical data to inform others so that changes can be made to save money. If somebody asks you, “What is environmental accounting?”, you can tell them that it involves financial transactions and data resulting from the interaction between the environment and humans on a large and small scale.