Environmental Accounting

Key Points:

  • If you have a passion for the environment and reducing organisations’ impacts, environmental accounting could be a great fit for you.
  • For many organisations sustainable and environmental issues are becoming more of a focus

Environmental accounting utilises traditional accounting and finance principles to help calculate the impact business decisions will have on the environment.

For example, before deciding to build a new factory, the organisation will need to determine the environmental impacts of building the factory in the preferred location as well as factoring in impacts for increased distribution and restoration at the end of the factories useful life. Environmental accounting is usually integrated into broader organisational decision making and supported as a part of the organisation's corporate social responsibility or sustainability function. There has also been a growing interest in the circular economy, where the full life-cycle of a product or service is considered as part of the organisation's decision making process.

Environmental accountants may collect and analyse information on material flows and usage as well as pollution controls for internal executive decision making. They may also collect data on environmental impacts, such as carbon emissions, or biodiversity loss for external reporting, including to investors and regulators. They could also be engaged to help develop organisation's environmental policies as well as assess the impact new environmental regulations will have on an organisation. Some environmental accountants may also be engaged in providing assurance services over the data reported by some organisations.

Environmental accountants are likely to work with a wide range of professionals including engineers and risk managers as well as senior executives and regulators. Some environmental accountants will work at a national level within government managing a nation’s natural resources and their economic flows and costs.

Karen McWilliams CA"Environmental accounting provides the opportunity for Chartered Accountants to apply their skills to the measurement, management and reporting of natural capital. They also have a key role to play in helping the organisations they work for to become more sustainable and reduce their environmental impact."
Karen McWilliams CA, Ethics and Sustainability Leader, Chartered Accountants Australia and New Zealand.

Why environmental accounting could be the right fit for you

Becoming an environmental accountant allows you to identify and measure how natural capital is being used and created across the full business life-cycle. When capital is being measured, businesses are more likely to take steps to manage that capital better. This may enable more efficient use of energy, water, and other natural resources - making for a more sustainable impact on the environment and a better outcome for the organisation.

If you have a passion for the environment and reducing organisations' impacts, environmental accounting could be a great fit for you.

Who can you work for?

In this specialisation, you could work in the government sector, where financial and environmental metrics can be beneficial to stakeholders that can be used effectively to affect future environmental policies and regulations. You could also be sought after by large organisations to help in environmental and broader sustainability reporting and providing inputs for internal decision making. Some environmental accountants may also work in the investment community, which is increasingly analysing organisation's environmental impacts.

Key skills:

  • Data analysis
  • Forecasting
  • Negotiation
  • Commercial awareness
  • Problem solving
  • Interpersonal skills
  • Communication
  • Diplomacy
  • Passion and awareness of social and environmental issues
  • Ability to work with a range of stakeholders