Download Green Products and Green Accounting

Green products and
Green Accounting
Dr. Sudhindra Bhat
Contents
 Green Products
 Different types of Green products
 Green accounting
 Goal of green accounting
 Scale and scope
 forms of environmental accounting
 System of national account
 Rational for environmental accounting
 the environmental cost and types of costs
 The advantage
 Environmental analysis
 Needs of green accounting
 Limitation of green accounting
 Conclusion
 References
Going Green………
 Going green is good to Mother
Nature. It’s good to conserve
energy and help save the dying
planet. Yes, the planet is slowly
dying because of our deeds.
 We don’t seem to care about all
things we do, but keep on doing
it. It’s only in the last couple of
decades, the awareness about
why the awareness about why we
have to go green and conserve
energy to save the earth from any
damage.
 We have been polluting the atmosphere like never
before and cutting trees that are extremely important
for ecological balance. If things are continue to go
awry, scientists predict that in a few decades there will
be a catastrophic change in climate which may lead to
warmer climate, unpredictable weather etc.
 we have to go green and conserve
energy to save the earth from any
damage.
 To this end many companies are
launching green products to their
customers in a bid to promote
energy conservation and
environmentalism.
 It’s good to produce, market and use
renewable products so that they are
not wasted once they are used.
Renewable products can be recycled
and used many times.
Advantages of Using Green
product…
 The advantage of using green
products don’t only lie on their
renewability; they also provide
more value to the buyer.
Renewable products are often
cheap to produce and hence
cheaper in the market.
 They don’t pose any threat to the
environment and not poisonous.
Most of the green products are
bio-degradable meaning, they will
naturally get degraded and won’t
just sit on land field for thousands
of years.
Types of Green Home Products?
 Green home products that can
be used throughout one's
home to boost efficiency,
protect the environment, or
offer eco-friendly alternatives
to products that can be
harmful to people or the
environment.
 This includes cleaning
products made of natural
materials, appliances or items
such as light bulbs designed to
be more efficient, water-saving
faucets, toilets, or
showerheads, or even flooring
 Cleaning products are often the first step
to selecting more green home products.
This can range from everything from
toilet cleaners and laundry detergent to
personal hygiene items such as shampoo.
Many of these green home products are
made from natural, organic materials or
vegetable-based cleaners.
 They are often free of dyes, perfumes,
and bleach, which can be harmful to
both people and animals, as well as
products like sulfates, phosphates,
ammonia, or chlorine which can be
harmful to waterways as well as plant
and animal life. It is important to keep in
mind that this is an oversimplified
definition of green home products used
for cleaning as well as their harmful
effects, and it is a topic that can be
researched much more thoroughly.
Different Green Products……
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Green Homes
Green Building
Green Products
Eco Friendly
Recycled Products
Beauty Products
Eco Products
Hair Products
Cleaning Products
Green Building Products
Eco Products
Eco Green
Reit Investment
Eco Friendly Material
 These materials have gone through
the composting process, they will
yield rich planting material for an
eco-friendly garden. This also
reduces the need to purchase
topsoil and fertilizer.
 Expert organizations such as the
United States Green Building
Coalition conduct assessments of
eco-friendly housing
construction. The U.S. Green
Building Coalition awards
Leadership in Energy and
Environmental Design (LEED)
certifications to architects,
engineers and other construction
professionals and firms.
Green Homes
 Green remodeling and are designing accessories, such as
pendulum lighting, natural bamboo screens and recycled
plastic furniture. In using eco-friendly natural materials,
green home accessories are becoming very popular and
not just because they are ecologically sound, but also
because they offer appealing designs and can even save
homeowners money.
 Green homes are ones that are energy efficient and earth
friendly. Green home communities are being built
throughout the United States, United Kingdom, Asia,
Australia and Europe in an effort to lessen the carbon
footprint humans leave behind.
Green accounting
 Is important tools for understanding the role played by the natural
environment in the economic
 It provide data which high light the both the contribution of
natural resources to economic wellbeing and the cost imposed by
pollution and resources degradation
 It describe an effort to incorporate environmental benefit and
costs into economic decision making
History of green accounting
 The term green accounting has
been enounced since the 1980s
and known as a management
tools.
 The conventional SNA was first
started in the USA in 1942.
 The present situation of green
accounting and its most evolved
from, sustainable accounting,
has been receiving continues
attention in the academic
accounting literature in the
early 1990s
 the concept started almost
three decades ago in the early
1970s with important
contributions.
Goal of green accounting
 Is to increases the amount of relevant for those who need or can
use it.
 Relevant data depend on the scale and scope of coverage
Scale and scope
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2.
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Applicable at different scale of use and scope of coverage
Application at an individual process level, a system, a product, a
facility or an entire company level.
Coverage may include specific costs, avoidable costs, future
costs and social external costs.
Decision on a scale and scope of application significantly
impact ability to excess and measure cost.
1.Environment Management
Accounting
 EMA is the identification, collection ,estimation, analysis, internal reporting,
and use of materials and energy flow information, environmental cost
information, and other cost information for both conventional and
environmental decision-making within an organization.
 For companies that have the goals of saving money, especially environmental
costs,
 and reducing environmental impacts, EMA provides essential information for
meeting those goals
Environmental Management
Accounting (EMA):
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Segment Environmental Accounting: to select an investment activity
and project.
Eco balance Environmental Accounting: to support PDCA for
sustainable environmental management activities.
Corporate Environmental Accounting ; to inform the public of
relevant information compiled in accordance with the environmental
accounting.
2. Environmental financial accounting(EFA)
 Financial accounting with a particular focus on reporting
environmental liability costs and other significant environment
costs.
3. Environmental national accounting (ENA)
 National level accounting with a particular focus on national
resources stocks and externality costs etc.
System of national account (SNA)
 SNA is the set of account which government compile routinely to
track the activity of their economic.
 SNA data are used to calculate major economic indicators
GDP,GNP, saving rate and trade balance figure.
 the system of NA view the relationship between the
environmental and the economy free economic perspective only.
Standard National Accounts
(SNA) framework
 NDP = C + I – D + X – M
Where:
NDP = Net Domestic Product
C
= final Consumption
I
= Investment (fixed capital)
D
= Depreciation
X
= Exports
M
= Imports
Misleadingly used as measure of
welfare: welfare not proportionate
to consumption of produced goods
Rational for environmental accounting
 GDP and NDP have been key
indicator in the economic
policy making
 Use as a measure of
economic progress of a
country and standard of
living.
 These traditional measure
of economic activity are now
recognize as a inadequate as
they can’t accurately
measure the contribution of
environment and the impact
of the economic activities on
environment
Environmental cost
 Major challenge in application of environmental accounting a
management tool is identifying relevant cost
 Cost definition determine by intended use of data.
Types of environment costs
1.
2.
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4
Conventional
Potentially hidden
Regulatory
Upfront and backend
Voluntary
Contingent
Image
The advantage
 Pollution preventing
 Designing environment & green accounting improvement
 Projection, cost, estimating life cycle in the environment
 Product circulation administration from environmental
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prospective
Supply process from environmental perspective
The product or produces liability
Environmental-centered managements system
Assessing , testing and reporting performance of
environmental activities.
Green Accounting Project for India - GAISP
This project aims to re-calibrate the
existing annual State Domestic Product
(“SDP”) accounts to incorporate changes
in each state’s stock of natural capital
(minerals, arable land, forests &
freshwater) and investment in human
capital (education, health, and pollution
control). This information will be a useful
frame of reference for future dialogues
on public policy and it is expected to
sharpen the focus on preserving
environmental capital and growing
human capital.
Environmental analysis
Environmental
analysis elements
forms of impact on the env.
By means of
Action taken as a result
of the env. analysis
Product services
activities
-Discharged rivers
-controlling impact on
environment
-adapting to legal
requirement
Technologies
-quantity, products nature, its -controlling the impact on
environment sensitivity
the environment.
-created/natural/possible
-current situation
-incident or accident.
-Product life cycle.
-Used underground water
discharge by sewage
-Gas emission in the atm.
-vibration noise
-other pollution factors.
-Studying product
-adapting to legal
requirements, according
to the legislation in the
filed
Need of green accounting
 Practically for developing countries like India it’s a twin problem
about saving environmental and economic developing.
 As the country economy is not very strong, hence it should be
improve first.
 A study by world bank estimated the about 34,000 crores were lost
by India due to environmental damage
 Company like AT&T are practically implementing green
accounting
Limitation of green accounting
 There is no standard accounting method
 comparison between two firms or countries is not possible if
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method of accounting is different.
It mainly considers cost internal to the company and excludes cost
to society.
Input for EA is not easily available because costs and benefits
relevant to the environment are not easily measurable.
It mainly consider the cost internal to the company and excludes
cost to society.
The cost for its tools and application initially is high.
Total economic valuation
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1.
2.
3.
A new term TEV has been added to the lexicon of recourses
economic.
Non use value: are independent of people’s result use of the resource ,
under it fall intrinsic worth and heritage values. These are categorically
classified as
Existence value : represent the value which receives no direct benefits.
Option value : refers to the willingness of the people .
Bequest value: refers to an individual’s willingness to pay for preservation of
a resources for future generation.
TEV= UV + NUV
= DUV+IUV+OV+NUV
Conclusion
 Green accounting takes into
consideration environmental
resources and changes in them, and
integrates the result with the system
of national account so as provide a
valuable information base for
planning and formulating policy for
the integrated sustainable
development and growth of the
nation.
 Actually, unless common people of
world are not made aware towards
environment safety, development of
this regard is a little bit of doubtful.
 Let us use Green products in every
use of life!!
Thank you