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Concept of Environmental
Accounting and Practice in India
Every business has an ductivity and leads to loss of ing has emerged. The joint
overriding responsibility to amenities. workshops organised by the
make the fullest possible use The developing countries United Nations Environment
of its resources both human like India are facing the twin Programme (UNEP) and the
and material. An enterprise is problem of protecting the World Bank set out to exam-
a corporate citizen. Like a citi- environment and promot- ine the feasibility of physical
zen it is esteemed and judged ing economic development. and monetary accounting in
by its actions in relation to the A tradeoff between environ- the area of natural resources
community of which it is a mental protection and devel- and the environment and to
member as well as by its eco- opment is required. A careful develop alternative macro in-
nomic performance. As far as assessment of the benefits and dicators of environmentally
Indian corporate sector is con- costs of environmental dam- adjusted and sustainable in-
cerned it is sad, but true that ages is necessary to find the come and product.
Parallel to this revision, the
statistical division of the Unit-
For India, both ‘Environment Protection’ and Economic
Dr. Mukesh ed Nations (UNSTAT) has
Chauhan Development’ are the matters of great importance. However,
developed methodologies for
some sort of tradeoff is needed between the two. For this pur-
a system of Integrated Envi-
pose, Environmental Accounting is required to measure the
(The author is a Lec- ronmental and Economic Ac-
environmental impact of economic activities by corporate sec-
turer in Commerce
counting (SEEA), issued as an
at Mahatma Gandhi, tor. A standard system of this type of accounting is still evolv-
Govt. Arts College, SNA handbook on Integrated
Mahe (Pondicherry). ing in India. The article provides an insight into the concept
Environmental and Economic
He can be reached
in the Indian perspective.
at mukesh_ Accounting.
garima@Yahoo.
com) Environmental accounting
needs to work as a tool to mea-
it has not been performing as safe limits of environmental sure the economic efficiency
a good citizen that’s why there degradation and the required of environmental conservation
are so many laws that have level of development. activities and the environmen-
been laid down and further A study on price of pol- tal efficiency of the business ac-
amended from time to time as lution in India made by two tivities of company as a whole.
and when required to bound World Bank officials for 1992 Management seldom tries to
the corporate sector to fulfil (M. Balachandran 2002) shows make proper arrangement to
their social responsibility for the impact of the major prob- save the environment unless it
better development of Indian lems in terms of cost. They is required as per law as there is
Economy. have calculated that damage to no direct relationship between
Responsibility towards en- environment costs India about investment and benefits.
vironment has become one of Rs. 34,000 cr per year, about In many contexts environ-
the most crucial areas of social 9.5 per cent of gross domestic mental accounting is taken to
responsibility. Recent years product. mean the identification and
have witnessed rising concern But unless the proper ac- reporting of environment spe-
for environmental degrada- counting work is done either cific cost such as liability cost
tion, which is taking place by the individual firm or by the and waste disposal costs. It is
mainly in the form of pollution Government itself, it cannot accounting for any costs and
of various types, viz. air, water, be determined that both has benefits that arise from change
sound, soil erosion, defores- been fulfilling their responsi- to a firm’s, products and pro-
tation, etc. It is a worldwide bilities towards environment cesses where the change also
phenomenon. It spoils human or not. Therefore, the need involves a change in environ-
health, reduces economic pro- of environmental account- mental impact.
Lamiya Lokhandwala