Essay on Accounting and the Environment

Most organizations had ignored for a long time the role that accountants play ion the enforcement of policy regulations touching on environmental conservation and sustainability. However, the introduction of environmental accounting has become a necessary topic for the prevention of environmental damage (CIMA, 2010). Specifically, involving accountants in planning and decision-making of organizations ensures that they can quantify the environmental costs of an organizations activities and hence be able to incorporate those expenses into the financial model. Notably, Andrew & Cortese (2011) opine that courtesy of environmental accounting, organizations can quantify the adverse environmental effects of their production activities and hence incorporate those in the manufacturing costs. As such, environmental accounting is core to the prevention of environmental damage and those dismissing it as a time waster fail to appreciate its role in environmental conservation.

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Management accountants have critical skills that can provide business intelligence on the scale of environmental damage that an organizations activities are likely to cause. For instance, in the production sector, accountants can quantify, financially, the costs of emissions to the atmosphere (Gray, 2013). Specifically, the net effect is global warming and climate change. In this case, environmental accounting would be crucial in providing ways of mitigating the likely adverse effects as well as proposing appropriate methods of ensuring sustainability (Moon, Gold & Chapple, 2015). Integrating accounting into the strategic planning of an organization makes certain that management accountants are involved in the making of decisions related to carbon trading as well as compliance with environmental conservation policies. Notably, in the view of Uno & Bartelmus (2013), the actions of individual business organizations affect not only their profitability but also the communities as well as the economy. As a result, it is critical to include accounting in environmental conservation so that the costs of environmental damage are quantified, and appropriate mitigation mechanisms applied.

References

Andrew, J., & Cortese, C. (2011, September). Accounting for climate change and the self-regulation of carbon disclosures. In Accounting Forum (Vol. 35, No. 3, pp. 130-138). Elsevier.

CIMA. (2010). Accounting for climate change. Chartered Institute of Management Accountants. 1st ed. London.

Gray, R. (2013). Back to basics: What do we mean by environmental (and social) accounting and what is it for?A reaction to Thornton. Critical Perspectives on Accounting, 24(6), 459-468.

Moon, J., Gold, S., & Chapple, W. (2015). Social Environmental Accounting and Reporting. In The Academy of Management Annual Meeting 2015.

Uno, K., & Bartelmus, P. (Eds.). (2013). Environmental accounting in theory and practice (Vol. 11). Springer Science & Business Media.