Abstract
In the contemporary circumstances, one of the greatest challenges companies are facing is the identification of environmental costs, both due to the lack of a unique classification and accounting coverage and because they occur when taking or not taking measures related to and relevant to environmental protection. Neglecting the ecological aspect of business increases the risk of a discrepancy between the consumption of natural resources and their limited availability. In order to cope with the constantly growing competition in modern business conditions, companies need an adequate information base. This information base is provided by environmental management accounting. It is focused on the use and management of natural resources and environmental costs as well as identifying the responsibility of individuals and the entire company for activities that are carried out to improve the environment. The aim of the chapter is to point out the role and importance of environmental accounting and especially management accounting for sustainable business development.
TopEnvironmental Accounting As An Integral Part Of Business
Ecological accounting, or as it is also called green accounting or environmental protection accounting, is a modern type of accounting with the task of providing an adequate information base aimed to enable company managers to carry out a cost-benefit analysis and, based on this, to make proper decisions on the company's ecological activities in the future. It refers to the collection, systematization, recording and reporting of the company's activities in the field of investing in the preservation of natural resources and the environment (UNCTAD, 2002).
Key Terms in this Chapter
Management Accounting: It is a field of accounting that focuses on providing financial information to managers within an organization to help them make decisions and involves analyzing financial data, creating budgets, and forecasting the future financial performance of the company.
Sustainable Development: A concept that aims to meet the needs of the present without compromising the ability of future generations to meet their own needs. It is based on the principles of environmental protection, social equity, and economic efficiency.
Cost Accounting: It is an integral part of management accounting and is considered the process of tracking and analyzing the costs associated with producing goods and services.
Managerial Decision Making: It is the process of making decisions in an organization or business, which involves identifying and analyzing problems, gathering, and evaluating information, and developing and implementing solutions.
Environmental Costs: Costs associated with the damage to the environment caused by human activities. These costs can include the costs of cleaning up pollution, restoring damaged ecosystems, and mitigating the effects of climate change.
Circular Economy: Economic system that is restorative and regenerative by design and which aims to keep products, components, and materials at their highest utility and value at all times, based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.
Environmental Management Accounting: The process of measuring, analyzing, and reporting the economic costs and benefits of an organization's environmental activities and also a tool and practice of incorporating principles of environmental management and conservation into reporting in order to provide the basis for managerial decision-making.
Sustainability: A concept that encompasses economic, environmental, and social aspects in order to ensure that current and future generations can continue to benefit from the resources available to them.