GREEN

ACCOUTING
Accou n ts s e mi n a r

By :
Akhi l a N
Jahn v i A R
N and a n a Ra j e s h
Lekh a
Sath a rs a n a
P riya ma n i
 WHAT IS GREEN
ACCOUNTING

Gre en a cco u nt in g i s a co n ce pt t h at a i m s to quan t ify

a nd va l u e nat u ral re s o u rce s a n d e co s ystem ser v ices
in eco no m ic ter m s . I t h e lp s to ca pt u re t he impact of
econ o m ic a ct iv it i e s o n t h e e n vi ro n me n t an d
in co r p o rates it i n to t ra d i t i o n a l a cco u n t i ng met hods.
By do ing s o, g ree n a cco u n t i n g p rovi d e s a frame work
for as s es s ing t h e s u sta i n a b i li t y p e r fo r man ce of
busi nes s es , ind u st r i e s , o r co u n t r i e s .
 IMPORTANCE OF GREEN
ACCOUNTING

B ala nce e cono m ic a n d en v iro n m e n tal goal s

Gre e n a cco u n tin g hel ps b u s i n e s s e s u n d e rstan d h ow to bal an ce t he i r tradi ti onal e conomi c
goals w i th e n v iro n m en ta l goa l s.

I mp rove e nvi ro n m en ta l p er fo r m an ce
Gre e n a cco un tin g ca n hel p bu s i n e s s e s i m p rove t h e i r e n vi ro n m e ntal pe r for mance , re duce
co sts, and i nvest in c l ea n er tec h n o l o gi e s .

Make i nfor me d d ec is io n s
Gre e n a cco un tin g hel ps d e c i s i o n - m ake rs m ake c h o i ce s t h at bal ance e conomi c prospe r i ty
w ith e colog i ca l res po n s ib il ity.

Ac h i e ve susta in a b l e de vel o pm en t
Gre e n a cco u n tin g hel ps organ i zat i o n s an d gove rn m e n ts ac h i e ve sustai nab le
de ve lopme nt by m in im izin g en v i ro n m e n tal h arm .
 COMPONENTS OF GREEN ACCOUNTING

* Soc ial Co mponents* *A cco u n t i n g a n d Re p o rt i n g

1 . * Soc ial costs*: C osts C o mp o n e n ts*
1. *En vi ro n me n ta l re p o rt i n g*:
related to labor pract ices,
D i s clo s u re o f e n vi ro n me n ta l
commu n ity impacts, and p e rfo rma n ce , i mpa cts , a n d
h u man rights. p o li ci e s .
* Enviro nm e nta l 2 . * Soc ial benefits*: *Eco n o mic Co mpo n en ts* 2. *S u sta i n a b i li t y re p o rt i n g*:
Comp o ne nts* Re p o rt i n g o n e co n o mi c, s o ci a l, a n d
B en ef its accruing from 1 . *Sustain able re ven ue*:
e n vi ro n me n ta l p e rfo rma n ce .
1. * Enviro nm e nta l costs* : commu n ity invest ments, Re ven ue gen erated fro m 3. *C a rb o n fo ot p ri n t a cco u n t i n g*:
Costs a s s o ciate d with ph ilan th ropy, and en viro n men tally frien dly M ea s u re me n t a n d d i s clo s u re o f
enviro nme nta l stakeh old er engagement . pro ducts o r ser vices. g re e n h o u s e ga s e mi s s i o n s .4
. *Li fe c ycle a s s e s s me n t *:
d egradatio n, 3 . * Stakeholder 2 . *En viro n men tal
Eva lu at i o n o f e n vi ro n me n ta l
conser vatio n, a nd en gagement *: Involvem ent expen ditures*: I n vestmen ts i mpa cts t h ro u g h o u t a p ro d u ct 's li fe
sustai na b il ity e ffo r ts. of stakeh olders, including in en viro n men tal protectio n, c ycle .
2. * Enviro nm e nta l sustain ability in itiatives, 5. *Fu ll co st a cco u n t i n g*:
employees, customers,
In co rp o rat i o n o f e n vi ro n me n ta l
liabili tie s*: Pote ntial costs an d eco -frien dly
su ppliers, and local a n d s o ci a l co sts i n to f i n a n ci a l
of env iro nme nta l damage, techn o lo gies.
commu n ities. state me n ts .
f ine s, o r l a ws uits . 3 . *Co st savin gs*: Savin gs
3. * Enviro nm enta l assets* : fro m reduced en erg y
Natura l re s o urce s , co n sumptio n , waste

ecosy ste ms , a nd min imizatio n , an d efficien t

reso urce use.
biodive rs ity.
 OBJECTIVES OF GREEN ACCOUNTING

1 . Capt ure t he va lue of natural 2. Q u antif y and valu e env ironmental 3. A s s e s s s u stai nabi li ty pe rfo rm a nce
res o urce s a n d e cosy ste m se r v i ce s assets
Anoth e r o bj e cti ve o f g re e n
O n e i m p o r ta n t o bj e cti ve of gre e n Green accou nting goes be yond acco u nti ng i s to provi de a
a cco un t i n g i s to capture the value trad itional f inanc ial rep or ting by fram e wo rk fo r a s s e s s i ng th e
of n at ura l re so urce s and e cosy ste m incor p orating env ironmental susta i nabi li ty pe rfo rm a nce o f
s er v i ce s. T hi s i n vol ve s quanti fy i ng consid erations into th e valu ation b us i ne s s e s , i ndu stri e s , o r co u ntri e s .
bot h ta n g i b l e a ssets l i ke fore sts, p rocess. It involves q u antif y ing and I ntegrati ng e nvi ro nm e nta l fa cto rs
wate r b o d i e s, m i ne rals, etc ., as we l l valu ing env ironmental assets su c h into f i na nc i a l re po rti ng s yste m s
a s i n ta n g i b l e a ssets l i ke c lean ai r, as land u se, water resou rces, energ y ena ble s stake h o lde rs to e va lu ate
biod i ve rsi t y, ca r bon se que strati on , consu mption, waste generation, the negati ve i m pact o f vari o u s
etc . By a ssi g n i n g a n e con om i c val ue greenh ou se gas emissions, etc . Th is ent i ti e s . T h i s i nfo rm ati o n ca n be
to t h e se re so urces and se r v i ce s, allow s for a comp reh ensive used to i de nti f y areas fo r
g ree n a cco un t i n g he lps hi ghl i ght assessment of th e tr u e costs and imp rove m e nt and m a ke i nfo rm e d
t h ei r i m p o r ta n ce i n de c i si on- m ak i ng benef its assoc iated w ith commerc ial d eci s i o ns rega rdi ng re s o u rce
p ro ce sse s. T he core foc us re m ai n s activ ities. allo cati o n a nd m a nage m e nt .
on i n co r p o rat i n g e nv i ron m e n t
co n si d e rat i o n s i n to tradi ti on al
a cco un t i n g m et hods.
 TYPES OF GREEN ACCOUNTING

E nvi ro nm e ntal Managemen t Accoun t in g E n v iro n m en ta l Fin a n c ia l Acco un t in g :

S o c i a l A cco u n ti n g :
(EMA): Foc us: Fin a n c ia l Rep o r t in g
Fo c u s : S o c i a l I mpa cts
Fo c us : Inte rnal Managemen t Ob j ect ive: T his t y p e o f g reen a cco un t in g
O b j e cti ve : S o c i a l a cco u n ti n g expa n d s th e
O b j e ct i ve : EMA i s pri maril y con cern ed con cen t rates on in teg rat in g en v iro n m en ta l
scop e o f g re e n a cco u n ti n g to i n c l u d e
w i t h h e lpi ng organi zat ion s assess an d d ata in to fin a n c ia l rep or ts. I t a im s to
soc ia l a n d co mmu n i ty i mpa cts . I t a i ms to
m a n a ge th e i r i nte rna l en viron men tal costs p rov id e in vestors, c red itors, a n d ot her
m ea s u re a n d re p o rt o n a n o rga n i zati o n 's
a n d re s ou rce u s e m ore effect ivel y. It aims sta keho ld ers w it h a c lea rer un d ersta n d in g
soc ia l p e r fo r ma n ce , s u c h a s i ts
to i d e n ti fy opportu ni ties for cost savin gs of a com pa n y 's en v iron m en ta l r isk s,
co n tri b u ti o n s to jo b c reati o n , co mmu n i ty
a n d re s ou rce e ffi ci e nc y wit hin t he op p or t un it ies, a n d im pa cts o n fin a n c ia l
d e ve l o p me n t , a n d s o c i a l re s p o n s i b i l i ty.
o rga n i zati on. p er fo r m a n ce.

Ecol ogical Foot prin t An a ly sis:

L ife Cyc le A ssessm en t ( LC A) :
Focus: Resource Use an d S usta in a b ilit y
Fo c us: P ro d uct o r P rocess An a l ys i s
Object ive: Ecol ogical foot p r in t a n a ly sis
O b j ect ive: LC A is used to a ss e s s th e
assesses t he en viron men ta l im pa ct o f
en v iron m en ta l im pa cts a sso c i ate d w i th
human act ivit ies by measur in g t he
t he en t ire life c yc le of a p ro d u ct , p ro ce s s ,
con sumpt ion of n at ural resources a n d
o r ser v ice, from ra w m ater ial extra cti o n to
comparin g it to t he Earth's ca pa c it y to
d isp o sa l. I t a im s to id en t ify o p p o rtu n i ti e s
regen erate t hose resources. I t a im s to
for red uc in g en v iro n m en ta l i mpa cts at
determin e whet her huma n a ct iv it ies a re
va r io us life c yc le sta ges.
wit hin pl an etar y boun dar ies.