links the economy to the biophysical environment. It enables people to understand the full spectrum of environmental costs and integrate these costs into decision making. Adoption of environmental accounting techniques increase visibility of environmental costs and benefits, thus increasing cost manageability. Environmental accounting gives the opportunity to: significantly reduce or eliminate environmental costs, and improve environmental performance.
the identification, measurement and allocation of environmental costs, internal or external, or both, to provide information to internal or external users.
a system for providing accurate and quantitative measures of the costs and resulting effects, efficiency and effectiveness of investments in environmental preservation activities. The benefit of undertaking a corporate environmental accounting initiative is that the identification and greater awareness of environment-related costs often provides the opportunity to find ways to reduce or avoid these costs, while also improving environmental performance (adapted from the Environment Australia website).
Any quantitative approach to linking financial and environmental performance.
A process of keeping national accounts of economic activity that includes gains and losses of environmental assets.
Incorporating all costs involved in design, production, use, disposal, and reuse of resources contrasted with traditional methods of accounting in which energy costs are assigned to overhead, and effects on and uses of air, water, and soil are ignored.
Environment accounting is a system in which an organization calculates its costs for environmental preservation, such as for waste processing, wastewater treatment, and R&D related to developing environmentally considerate products, and measures those expenses against income such as savings from conserving energy and profits from selling recycled products, to come up with an environment-related economic effect. The organization then conducts a cost/effect analysis, and after making an appropriate business decision promotes a more effective, more efficient approach to environmental preservation. The organization also considers material effects such as the reduction volume of CO. Back to glossary index
Environmental accounting can be considered either a subset or superset of accounting proper, because it aims to incorporate both economic and environmental information. It is a growing field that identifies measures and communicates costs from a company’s actual or potential impact on the environment. 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.
