Popular environmental and natural resource accounting called GREEEN ACCOUNTING
Prof. Ramachandraiah R K
Assistant Professor of Commerce and Management
Government First Grade College, Tumkur (INDIA)
Abstract:
Green accounting is a popular term for environmental and natural resource accounting. It is an more extensive field focused on factors like resource management and environmental impact. Green accounting will help the organization to identify the resource utilization and incurred cost. Practically for developing countries like India it is a twin problem about saving environment and economic development. This method records cost and benefits of a business concern. Green Accounting and reporting in India is in developing stage both at the corporate level and at the national level. The present paper concentrates on understanding the concept of green accounting. Key words: Green accounting.
Introduction
As the 21st Century continues to be an age of progress and prosperity, more and more prominance is being laid on nature and the Environment that surrounds us. Humans have already caused damage that is beyond repair to the Environment that surrounds them. However, recognizing the importance that the Environment plays in our survival and careful assessment of the damages and repercussions that the world would have to face in the long run, is leading more and more organizations, government and associations to recognize not just the need to protect the environment but also to create awareness among the masses about the importance of the Environment.
Just as Environmental awareness today is growing at a pace like no other; so is the need to account for the well-being of the Environment. Corporates and Businesses alike are understanding and formulating steps to promote green and environment-friendly causes for the present and the future.
Among various other steps that are being taken in this regard is a new branch of accounting called “Environmental accounting or green accounting”.
Meaning and History:
The term Environmental accounting was used for the first time in the year 1980s by Professor Peter Wood.
Green accounting is a new branch of accounting that aims at accounting for the Environment and its well-being. Although it is a completely new field/branch of study and practice; it’s soon gaining relevance because of its importance. In addition to merely checking a Company’s profit or loss or its revenue and expenses environmental or green accounting is a growing field that focuses or provides for accounting the environmental impact, certain factors may cause to a business or organization.
The adoption of Green accounting depicts the commitment of an enterprise/organization has towards the environment. It deals with 3 most important factors people, profitability and the planet and also more or less deals with the costs and the advantages or benefits an environment brings to a business concern.
Importance of Green accounting
Changes in the environment have a negative bearing on not just the Environment but on the economy as a whole. And, it is a well-known fact that changes in the economy have a direct bearing on the changes in any business. It is also important to note that the Gross domestic product of a country can be affected by the environmental and climatic change. In addition to this as people become more aware and conscious of Environmental issues, the need for sufficient and appropriate corporate disclosures is growing all the more.
NEED FOR STUDY
Many companies do not give much importance towards environmental accounting when compared to its financial accounts. The natural resources are depleting rapidly and hence keeping an account of the environmental costs would help in using the resources efficiently and abide by the environmental policies. The need for this study was to make people understand and aware about the importance of environmental accounting/environmental reporting in companies so that there would be better sustainability as well as to understand the corporate social responsibility of the companies towards the environment.
OBJECTIVES OF THE STUDY
Conclusion:
The major purpose of Green accounting is to help businesses understand and manage the potential quid pro quo between traditional economics goals and environmental goals. The countries which are adopting green accounting are Norway, Philippines, USA, and Japan …etc. Green accounting in INDIA is in developing stage. It is one of the best methods to be followed for sustainable development. In fact, most of the world at large is still unaware of the term Green Accounting or its importance. Even though Indian corporates and businesses comply with requirements such as Corporate Social Responsibility etc., there are no clear-cut practices or policies in place to protect the Environment. Hopefully, with more awareness on the subject, Green Accounting will become a practice and reality among all firms one day.
SUGGESTIONS
There is a necessity to create awareness about green accounting to the organizations as well as the general public. The government must make it mandatory for all the organizations to implement green accounting. Strict actions must be taken by the government if environmental norms are not followed by the organization. The company must disclose its information regarding environmental accounting as a part of its annual report. There must be more of strict environmental norms and legislation created by the government.
References