It is no great secret that businesses are created to deliver products and services in order to earn a profit. However it is important that companies think about their balance sheet in terms of whether they are in the red or the black and also the "green", too. With the growing green consumer awareness, companies are now expected to align their business strategies with environmental schemes.

Environmentally conscious businesses have already discovering that they are able to initiate strategies to help them reduce their carbon footprint, minimise their environmental impact, make the best use of natural or local resources, become more energy efficient, reduce costs, and display social responsibility - all at the same time.

More and more companies want to know how they can be part of a growing movement of doing green business and benefiting from the change. The first step is to consider green accounting into their business model.

What is Environmental Accounting?

The term, Environmental accounting, is a way of describing changes to your business practices that would be more environmentally friendly. This could be improving environmental performance, controlling costs, investing in technologies that require less energy or produce fewer emissions. Doing greener business is not about increased costs and can attract a new customer base that would have never considered you before.

Environmental Management Accounting

According to the EPA, environmental management accounting is "the identification, prioritisation, quantification or qualification, and incorporation of environmental costs into business decisions." Environmental Management Accounting uses "data about environmental costs and performance for business decisions. It collects cost, production, inventory, and waste cost and performance for business decisions. It collects cost, production, inventory, and waste cost and performance data in the accounting system to plan, evaluate, and control."

Environmental management accounting therefore represents a combined approach which provides the switch from conventional accounting to consider things such as increase material efficiency, reduction in environmental impact and risk, and reduction in costs of waste.

Implementing Environmental Accounting

When making the move to implement environmental accounting there is a lot to consider and for big businesses it makes sense to consult specialist help. You need to consider the working site, research and development, and how staff will be informed and even trained. In the past, green initiatives were hampered by lack of understanding by management, who would normally consider them to be costly and a waste of time.

Environmental accounting can help management recognise that the tax benefits, rebates and lower costs of being environmentally friendly add up to a real savings for being greener in business.