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Unit 3: Environmental Accounting

Eco Balance Environmental Accounting: This is an internal environmental Notes
accounting tool to support PDCA for sustainable environmental management
activities.
Corporate Environmental Accounting: This is a tool to inform the public of
relevant information compiled in accordance with the Environmental
Accounting. It should be called as Corporate Environmental Reporting. For
this purpose the cost and effect (in quantity and monetary value) of its
environmental conservation activities are used.
2. Environmental Financial Accounting (EFA): Financial accounting with a particular
focus on reporting environmental liability costs and other significant environmental
costs.
3. Environmental National Accounting (ENA): National Level Accounting with a
particular focus on natural resources stocks & flows, environmental costs and
externality costs etc.

4. Need of Environmental Accounting at Corporate Level: It helps to know whether
corporation has been discharging its responsibilities towards environment or not.
Basically, a company has to fulfill following environmental responsibilities.
Meeting regulatory requirements or exceeding that expectation.
Cleaning up pollution that already exists and properly disposing of the
hazardous material.
Disclosing to the investors both potential and current, the amount and nature
of the preventative measures taken by the management (disclosure required
if the estimated liability is greater than a certain percent say 10 per cent of the
companies net worth).

Operating in a way that those environmental damages do not occur.
Promoting a company having wide environmental attitude.
Control over operational and material efficiency gains driven by the
competitive global market.
Control over increases in costs for raw materials, waste management and
potential liability.

Self Assessment

Fill in the blanks:
1. ………..is defined as the accountants’ contribution towards environmental sensitivity in
organizations.

2. The …………accounts include data on stocks of natural resources and changes in them
caused by either natural processes or human use.
3. ……………….is a tool to inform the public of relevant information compiled in accordance
with the Environmental Accounting.
4. The concept of ………… accounting was developed by the Dutch.
5. The National Accounting Matrix including Environmental Accounts (NAMEA) structures
the accounts in a matrix, which identifies ………….emissions by economic sector.

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