The Importance of Green Policies in Accounting

Accounting has two important roles to play in environmental matters. Firstly, as an employer, they should be setting high green standards, so that accountants continue to hold credibility and receive independent assurance. And secondly, they can advise and direct client firms to adopt green accounting measures, making them more environmentally friendly.

This blog will explain environmental accounting and the importance of green policies.

Environmental accounting

Environmental accounting is a vital tool to help manage environmental impacts and operational costs. This type of green accounting helps with the identification, collection, analysis and use of information for business decision making. This could include information on:

• Energy use

• Water and raw materials use

• Expenses based on environment related figures

Adopting green policies in accounting

The strong workforce demand for climate positive leadership is forcing a change in workplace cultures. And, with so much at stake, companies seen as greenwashing, or not taking their climate responsibilities seriously risk a negative backlash both internally and online.

Accountants have a part to play here. When tackling greenwashing, it’s important that businesses make accurate statements about their climate credentials and their social commitments. Accountants are highly trusted and act as independent arbiters of confidence. So, verifying claims is something accounting firms can adopt as a green policy.

Environmental accounting can also include the assessment of the environmental cost that corporate activities generate. All businesses, regardless of industry, generate an environmental cost to some degree. These costs impact society and need to be reported in a transparent way, as would any other business expense.

Accountants can make sure that companies are able to benefit from sustainable green policies by reporting and highlighting their positive impact. Boosting employee retention, recruitment, customer satisfaction and brand appeal, accountants may also be able to ensure green policies are aligned with local and national regulations - allowing them to apply for green funding and subsidies.

In summary

Accountants have an important role to play in adopting green policies. Being transparent and sustainable businesses will ensure accountants remain viable and trustworthy firms capable of performing independent audit and advisory roles. They also have a part to play in helping other businesses become more sustainable and responsible to the environment in their business practices.

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