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Why do environmental accounting?


Why do environmental accounting?

Environmental accounting, also known as green accounting or sustainable accounting, is the process of incorporating environmental information into financial statements and decision-making. It aims to provide a more complete and accurate representation of a company's financial performance by taking into account the costs and benefits associated with its environmental impacts.

There are several reasons why environmental accounting is important:

  1. Environmental impacts can have financial consequences: A company's operations can have both positive and negative impacts on the environment, and these impacts can have financial implications. For example, a company may incur costs for complying with environmental regulations, or it may face potential fines or legal liabilities if it causes environmental harm. By accounting for these costs and benefits, environmental accounting can provide a more accurate picture of a company's financial performance.

  2. Environmental accounting can help identify opportunities for cost savings: By accounting for the environmental impacts of its operations, a company may be able to identify opportunities to reduce its environmental footprint, which can also lead to cost savings. For example, a company may be able to reduce its energy consumption by investing in energy-efficient equipment, which can save money on energy bills and reduce greenhouse gas emissions.

  3. Environmental accounting can enhance transparency and accountability: By disclosing information about its environmental performance, a company can demonstrate its commitment to sustainability and increase transparency and accountability to stakeholders. This can be particularly important for companies operating in industries with significant environmental impacts, such as mining or oil and gas.

  4. Environmental accounting can support decision-making: By incorporating environmental information into financial decision-making, companies can make more informed decisions about investments and operations. This can help them to identify and mitigate potential risks and to take advantage of opportunities for sustainable growth.


Overall, environmental accounting can provide valuable information that can help companies to manage their environmental impacts, reduce costs, and improve their financial performance.

Don’t you know how to start? NEMS AS has over three decades of experience with environmental accounting. Our SaaS solutions NEMS Accounter and NEMS Panorama have streamlined, automated and simplified environmental accounting and reporting for numerous clients. 

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