Environmental Accounting: A Strategic Tool for Sustainable Development

Abstract

Environmental accounting (EA) does not only trace money. Natural resources such as air, water, soil and ecosystems are also tracked. Environmental and economic data are combined to give better decisions to businesses through EA. There is increasing pressure on companies to report on their environmental performance just as they report on their financial performance by investors, regulators, and the general populace in very recent times. The research paper views EA in its various perspectives: rules and regulations, methods and frameworks, opportunities and challenges, pros and cons, and its relevance in corporate sustainability. It also reports on previous studies and emphasizes their shortcomings and also introduces a new model which is a combination of financial, environmental, and social data. Lastly, the paper proposes that finance departments should consider incorporating EA in their periodic reports going forward because the stringency of global disclosure levels will continue to rise. It is concluded by policy recommendations, an analysis of various nation choices as well as future research ideas.