Update: This article was last updated on 19th March 2020 to reflect the accuracy and up-to-date information on the page.
With the advancement of technology, various software and their hosting methods have evolved over the years. Although the technology has optimized the performance of CPAs and streamlined the accounting process, it has impacted the environment in an unfriendly way.
Hence, to mitigate the harmful impact of technology on the environment, more and more emphasis is being laid on the environment surrounding us. Organizations have now started recognizing its importance and formulating steps to promote green and environmental-friendly causes.
Green Accounting is one such term that maps the environmental factors to the business’ plans so that the environment is not ignored in any way.
Table of Contents
What is Green Accounting?
Green accounting or environmental accounting demonstrates an organization’s commitment towards the key aspects of our surroundings such as the planet, people, and profitability.
Environmental accounting practices are mainly implemented by companies to include the environmental costs in the financial strategy.
It incorporates the environmental assets and resources into the corporate accounts. It measures the social, environmental and economic impact of business. With the implementation of Green Accounting, the corporate sector becomes aware of the environmental parameters and inculcate the costs in their budget.
Types of Green Accounting
Below are three different types of Green Accounting:
1. Environmental Management Accounting (EMA)
This type of green accounting incorporates both the environmental and economic information by identifying the resource usage and the expenses involved in a company’s economic impact on the environment.
EMA defines the approach that a business is expected to follow in order to analyze the environmental factors and manage the workflow of the organization accordingly.
2. Environmental Financial Accounting (EFA)
As the name suggests, this type of accounting deals with the financial aspects of the business with respect to the environment. This type of accounting is concerned with accounting for environmental transactions which have an impact or are going to impact the financial performance of an organization. The financial analysts responsible for Environmental Financial Accounting analyze the financial risks as well as profits with respect to the environmental factors specific to the business.
3. Environmental National Accounting
This type of accounting involves national level accounting with a focus on green costs and natural resources. With Environmental National Accounting, the environmental aspects related to a nation is integrated with the National Accounts (NA).
The infographic below demonstrates the organizations’ commitment to people, planet, and profitability through Green accounting.
How To Implement Green Accounting?
Be it accounting or any other business, everyone is responsible for making business decisions that may help to improve environmental conditions.
Here are some ways to implement green accounting in your office:
1) Educate Employees – Train accountants to use eco-friendly methods to work in the office. Assign them training courses, provide them incentives for working green, and make energy management fun with interactive activities.
2) Minimize Paper – Try to reduce the use of paper in the office premises. Creating a completely paperless accounting process may not be practical, but the use of paper can be reduced to some extent. Track the number of papers per employee, make printing less convenient, and request a paperless statement from the banks.
3) Implement Green Techniques – Use techniques in the accounting system to implement a greener solution. Create monthly green challenges, opt for eco-friendly office products, embrace renewable energy, maximize natural light, reuse and recycle.
4) Increase Mobilization – Encourage accountants to lower commute emissions by biking, walking, carpooling, or working from home. Adopt cloud accounting to reduce the number of people traveling to the office and reduce the company’s carbon footprint.
5) Decrease Energy Consumption – Reduce the energy consumption of the office, which will not only help to save the environment but also help to reduce energy bills. Use energy-saving bulbs, implement light sensors, turn down AC, and upgrade your appliances.
Have more such ways to implement green accounting? Share your views with us in the comment section.
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Mike Schroder8 years ago
There is no reason which can deny that there is a strict need of Green Computing at the moment. People are accepting it and making sure that they follow it their businesses.
Patrick Hesselberg8 years ago
It must be accepted on a grand level then only it can create an impact globally.
Aditi Tyagi8 years ago
Green Computing should also be accepted by accountants on a much larger scale….http://www.examiner.com/article/green-computing-the-next-big-step-for-accountants-using-quickbooks.
Akshay Senger8 years ago
Keeping in mind the alarming situations of Global warming, small organizations should also start moving towards this green technology.
Fleta8 years ago
Todcouhwn! That’s a really cool way of putting it!
Anil Tomar8 years ago
Awareness is the key here, sessions should be held occasionally to emphasize about what this technology can do.
Christian Axelsson8 years ago
The clock always keeps ticking until you notice it. Means until and unless people don’t start caring about it the condition will get worsened.
Aditi Tyagi8 years ago
Green Computing has some great benefits….it will not only aid the environment but will also save many resources for a sustainable development.
Boone Gorges8 years ago
More and more businessmen are taking out their time in order to support the cause….that’s a silver lining.
Kia8 years ago
Quickbooks automatically blokcs credit card numbers in the payment info tab no matter what access i give them. no one can see it besides me the admin. i need them to be able to see the credit card number because we need to enter it into a whole different program. urgent
Eduardo Reveles8 years ago
Make way more and more entrepreneurs to support and inherit this good cause. That’s what the government needs to work on.
Aditi Tyagi8 years ago
Even small entrepreneurs should adopt green computing…it might cost them a little…but then, green computing will help in securing the future of next generations.