Governments of different countries are also imposing taxes on companies who are polluting the environment. This approach has also forced organizations to think about their activities. They are now focusing on ecology more than ever due to these reasons. The cost of using environmentally friendly technology is now being considered very important by the business sectors all over the world. These costs are now being given special attention when managers are deciding about other costs. The role of environmental cost has now found a huge role in accounting. Environmental has been identified as a method by which the environment can be given appropriate attention.
Both businesses and common stakeholders can take advantage of this concept and can help save the environment. The purpose of Environmental accounting is to bring costs related to the environment in the notice of business leaders who then can take initiative in lowering these cost and in turn, can help to save the environment from hazards (Environmental Protection Agency, 2010). It is a method through which the organization can lower its cost and at same time, ecology can be preserved.
Environmental Management accounting is a dimension of environmental accounting and is defined as a procedure in which information regarding environmental cost and performance is collected and analyzed in order to help organizations make decisions (Environmental Protection Agency, 2010). Environmental Management accounting involves life cycle costing and strategic planning for managing environment. Environment-related costs were usually given under the overhead costs and because this manager had no way of knowing the potential damage it caused. After the introduction of environment-related cost were grouped separately this gave managers an opportunity to lower these costs (United Nations 2001).
By lowering these costs a manager can not only decrease overall cost but can also play a role in protecting the environment. Environmental Management accounting is two folded, it can be corporate focused or environment focused. This makes this concept worthy of attention by the corporate sector. It was because of this concept that business found new and better ways in which they could protect the environment and at the same time lower costs. Recycling and other techniques were introduced by managers in order to save
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