The Green Accountant
If we assume correctly, and we usually do, that the primary financial objective of a private sector organisation is to maximise shareholders’ wealth. then it would follow that, as part of our everyday work as accountants, we assist with decisions relating. to investments, financing, dividends and the management of risk. Accounts don’t often see environmental issues as a large part of this role!
Green accounting factors in the costs of an organisation’s impact on the environment as part of its overall set of measures. It helps businesses to understand, manage and account for this impact while devising sustainable ways to balance their financial objectives with environmental goals.
So why should accountants take interest in this topic? Well, there are carrots and sticks for businesses, and any accountant with a good grasp of the subject has enhanced value in today’s environment where every advantage needs to be sought and won.
The Sticks
The European Council’s Directives (on Landfill, Air Pollution, Waste Water, Chemicals and Controlled Substances etc.) have been implemented across Europe. Businesses have no choice but to conform to these. An accountant must be well briefed in the legislation and regulation that affects his sector.
Government Policies, which may or may not have supporting legislation, can strongly influence the ease or difficulty with which a business can carry out its preferred activities. We can take examples from motor tax being based on CO2 emissions, WEEE obligations on retailers and clawback of subsidies from farmers who surpass thresholds of pollution. Again the astute accountant knows the current policy, understands the impact on his employer and even anticipates changes that may influence future decisions.
The Carrots
The rewards for embracing a Green Culture are numerous. Rather than simply reaching the standard required by legislation, many companies strive to be the standard setter.
The big four advantages are:
- Customers view the organisations with environmentally friendly products in a better light, leading to a competitive advantage.
- Involvement in environmental issues enhances relations between the business and its local community. This can improve its image, and brand awareness, on a national and international stage.
- Many investment funds now include environmental analysis in their decision making process.
- Employee loyalty is enhanced by pride in the environmental work of an organisation.
For many years ‘Green Issues’ have been much maligned but changes in legislation, regulation, subsidisation, customer relations. These crucial investment decisions have brought them front and centre.
The question is: Are you ready to be a Green Accountant?
If the answer is yes, then contact us today to find out more about our professional accountancy courses.
Study CPA Ireland, ACCA or AAT Online.
