Presented by Faresh Haroon

Accounting
Accounting

is the discipline of measuring, communicating and interpreting financial activity.

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.

Environmental accounting system

An environmental accounting system is composed of environmentally differentiated conventional accounting and ecological accounting. Environmentally differentiated accounting measures impacts of the natural environment on a company in nominal or monetary terms.

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.

Why environmental accounting?

Possible significant reduction or elimination of environmental costs Environmental costs and benefits may be overlooked or hidden Customers may prefer environmentally friendly products and services Can support the development and running of an overall environmental management system, which may be required by regulation for some type of businesses.

 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.

Different environmental accounting disciplines

Environmental accounting can be broken down in to three disciplines: Global Environmental Accounting(GEA) National Environmental Accounting(NEA) Corporate Environmental Accounting(CEA)

Corporate Environmental accounting can be further subdivided into: - Environmental Management Accounting - Environmental financial Accounting - Environmental Audit

Corporate environmental accounting

It is about making environmental related costs more transparent within corporate accounting systems and reports. Primary focus is to report environmental related costs within internal management accounts, or external financial accounts or other public reports.

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.

CEA and emerging field

CEA initiatives are being undertaken by: United nations Division for sustainable development. National Governments. Professional accounting bodies Leading companies

Environmental Management Accounting(EMA)

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.

Life Cycle of the Product

This concept is uesd to optimize the environmental performance of a single product or to optimize the environmental performance of a company. It is through life cycle assessment or life cycle assessment.

Environmental financial Accounting

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.

Global environmental accounting

Is an accounting methodology that deals with energetics, ecology and economics at a global scale.

National Environmental Accounting

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.

Thank You