Advances in Environmental Accounting

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Environmental accounting, which is also known as green accounting, is an important tool that helps in managing the operational and environmental costs of the Earth’s natural resources. It incorporates environmental and economic data, either in the public or government sectors.

Gaining knowledge of environmental accounting is beneficial if you want to work as an Environmental Accountant. You can easily do this by enrolling in accounting and finance certification courses such as the US CMA program. Keep scrolling to learn more about environmental accounting and how taking part in the CMA course can be challenging but fulfilling in the long run,

What is Environmental Accounting?

Environmental accounting most often refers to environment-specific costs which might include waste disposal costs and liability costs. When a firm modifies its processes and products and also the environmental impacts, the costs that arise are part of environmental accounting.

All types of data a firm collects can be part of the accounting data. Some of these data are input costs, market costs, and legal costs. Environmental accounting is a relatively new concept but it is gradually catching on.

The natural resources of a nation such as water, forests, and air are commonly known as the environment. A firm uses these resources in their activities which affects them. Proper accounting data becomes necessary in such circumstances to show the impact of a firm on the environment. Environmental accounting comes into function during this as it records the cost and estimates arising from the activities.

Environmental Accounting in the Private Sector

The private sector consists of companies in various industries. Environmental accounting used in a systematic matter by companies showcases the environmental costs incurred. The support of management is necessary for the working of environmental accounting.

If a company wants to ensure environmental accounting, then it must create teams consisting of environmental accountants, engineers, chemists, production managers, and operators. The individual members of the team need to work together to realise the importance of environmental accounting.

Environmental Accounting in the Public and Government Sector

The Indian Constitution provisions the protection of the environment through various laws and articles. A few of these include:

  • The Factories Act 1948
  • Water (Prevention and Control of Pollution) Act 1974
  • Water Biomedical Waste Rules 1998
  • Biological Diversity Act 2002
  • Indian Penal Code
  • Forest (Conversation) Act 1980
  • Indian Fisheries Act 1987

The Department of Environment provides a healthy environment to the country. According to the Companies Act 2013, large companies have to comply with the CSR or Corporate Social Responsibility Rules, 2014. CSR ensures that the company follows the law to provide ecological stability, animal welfare, and conversation of natural resources like land, air, and water.

As per the Ministry of Environment, all organisations have to disclose the measures they adopt for waste mitigation, waste recycling, waste management, and environmental protection. Only a handful of the organisations have disclosed adequate environmental information. There is a need for the development of a precise environmental policy. 

Benefits of Environmental Accounting

The pros of environmental accounting heavily outweigh the cons. Here is an overview of some of the benefits of this type of accounting.

  • Protection of the environment – The primary goal of any business firm is to maximise its profit. The aid of ecological and social systems helps in this goal. Environmental accounting keeps a track of the natural resources that the firm utilises for its functioning. The firm cannot harm the environment or cause pollution.
  • Environmental accounting showcases the costs of using natural resources and the income from them. There is transparency in the presentation of data.
  • Environmental accounting keeps track of the companies to ensure that they are taking care of their social responsibilities.
  • The environmental costs can be reduced by the policies of business firms. Green technology can come in handy for decreasing environmental costs.
  • Once you understand the environmental costs of a product, you can take note of it and utilise it. The firm can achieve better pricing of products and also give importance to environmental issues.
  • The development of a business firm depends directly on environmental accounting along with environmental performance.

What does an Environmental Accountant do?

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Getting CMA certified is the first step to becoming an Environmental Accountant. You can become a CMA by getting the CMA certification from a reputed institute. 

The role of an Environmental Accountant is to find out the environmental costs of a firm. They track the origins of the costs so that they can be reduced in the future. An Environmental Accountant can reduce the company’s costs by suggesting the usage of alternate products or chemicals. 

The identification of environmental costs is one of the big tasks of the person. This can aid the company to design better products using lesser natural resources on the planet. The job of an Environmental Accountant is multi-faceted. They might identify a new income source to keep the company running.

They analyse financial trends over a period of time to form models for future trends. Stakeholders communicate with an Environmental Accountant whenever an environmental incident takes place. They prepare reports for the company which would help in the evaluation of profits.

An Environmental Accountant may even have additional job roles such as making the budget and managing human resources.


Environmental accounting is the need of the hour. Hiring an Environmental Accountant can prove to be hugely advantageous for any organisation. The organisation can keep track of the environmental costs its products incur and act accordingly. The US CMA program is the best course for candidates who want to work exclusively in the field of environmental accounting.

The IMA (Institute for Management Accountants) located in the United States presides over the globally recognised highest credential in management accounting, the Certified Management Accountant or CMA certification. The CMA program incorporates the skills of accounting, corporate finance, performance management and cost management among various other practices.

You can become a CMA by enrolling at Imarticus Learning which is your one-stop destination for the best training. With Imarticus, you can study for the CMA exam and develop skills in environmental accounting. Enrol in the CMA Certified Management Accountant course today and get the best possible training for your CMA exam!

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