What is Environmental Accounting?

Environmental EngineeringIf you have ever thought about pursuing a career within the field of accounting, you might be consider environmental accounting as a career path. What is environmental accounting? Although broadly defined, environmental accounting is a form of accounting that analyzes economic and environmental information in order to help businesses make prudent financial decisions. Environmental accounting occurs at both the corporate and national level. To promote optimal business functioning, environmental accountants measure and communicate the economic impact that a company will have on the environment. Some of the costs that these accountants will analyze include those involved in cleaning up and/or remediating a contaminated site, penalties and taxes, environmental fines, waste management costs, and the purchase of technologies designed to facilitate pollution prevention.

Generally, an environmental accounting system will consist of two parts: ecological accounting and environmentally differentiated conventional accounting. Ecological accounting is the aspect of environmental accounting which measures how a company influences the environment with physical measurements. On the other hand, environmentally differentiated accounting measures the effect a company is having on the environment in financial terms.

Environmental Accounting-Specializations

In the article “Environmental Accountants Do It for the Green,” John Rossheim notes that there are three areas of specialization within the field:

1. Environmental Management Accountants

These individuals collect and analyze data regarding pollution controls and materials flows for executives.

2. Environmental Financial Accountants

Environmental financial accountants create analogous reports for external audiences, including regulators and investors.

3. Environmental National Accountants

These individuals analyze environmental accounting from a very broad prospective by considering the use of natural resources as well as how environmental impacts are being managed throughout the country.

Environmental Accounting – Subfields

In addition to including areas of specialization, the field of environmental accounting also incorporates several subfields. Some of them include:

1. Global Environmental Accounting

Global environmental accounting is the branch of accounting that pertains to areas such as ecology, energetics, and economics on a worldwide scale.

2. National Environmental Accounting

National environmental accounting is the branch of accounting that pertains to the economic implications that an entire country has on the environment.

3. Environmental Management Accounting

Environmental management accounting places focus on making internal business strategy decisions. It is often defined as the identification, analysis, and use of two distinct forms of information: 1) Physical data regarding the use, flow, and fate of natural resources such as energy and water and 2) Monetary data regarding costs and savings that pertain to the environment.

Related Resource: Green Job Degrees

Careers In Environmental Accounting

Individuals who find environmental accounting intriguing should note that there are a plethora of positions that can be obtained within the field. However, it is important to note that there is no environmental accounting degree that can be obtained in order to pursue this vocational path. Instead, individuals should opt to obtain a degree in accounting, official certification, and internship experience. According to Simply Hired, individuals who work as environmental accountants can expect to earn about $67,000 annually.