Simply put, environmental accountants calculate the environmental costs of business activity. While some may work on the environmental costs of societal actions as a whole, most deal solely with their company's own costs. These environmental costs have traditionally been lumped in with overhead, where they can't be linked to the products and processes that generate them. Environmental accounting identifies environmental costs specifically, tracking their origins so management can make decisions that reduce them.
What Does an Environmental Accountant Do?
While the most obvious application of environmental accounting might be calculating a company's cost of environmental compliance, this is only one of many relevant activities. Accountants' skills can also help save on costs to the environmental itself. Many times, environmental accountants can save on both environmental and financial costs by making calculations for the use of alternate chemicals, processes, or product designs. Identifying environmental costs can help companies design cleaner products and make more efficient use of resources.
Environmental accountants may account for the sale or trade of pollution licenses, and licensing of clean technologies. They might also identify potential new sources of income, such as the sale of waste. These professionals also help implement a company's environmental management system (EMS). An EMS is a voluntary management technique that ensures systematic implementation and review of customized environmental and safety best practices. Accountants can be involved in planning, reviewing, and reporting on a company's EMS. EMSs following the international standard ISO 14001 are particularly beneficial to the credibility of companies involved in international activities.
Environmental accountants may be involved in three types of accounting:
- Managerial Accounting - internal accounting intended to help company management make decisions about purchasing, capital investments, product cost and pricing, process and product design, and compliance strategies. An environmental accountant may create, tweak or document custom accounting practices and systems for their company to accomplish this.
- Financial Accounting - a form of accounting intended for external reporting. Financial accounting reports on a company's environmental costs and liabilities to investors and lenders. Financial accounting follows Generally Accepted Accounting Principles (GAAP).
- National Accounting - accounting for a country's natural resources, including national supplies of resources like oil or timber, their economic flows, and their costs.
Where Does an Environmental Accountant Work?
Environmental accountants may be involved in management or financial accounting for private companies. These positions are generally available in regulated industries that use raw natural resources or create waste streams such as oil, mining, automotive, chemical, and manufacturing firms. Companies providing professional services usually do not have a need for environmental accountants.
Some work for federal agencies such as the U.S. Environmental Protection Agency (EPA), where they may calculate the costs of pollution prevention initiatives, the use of alternate chemicals, or the environmental costs of a particular industrial activity. Some work for nonprofits and international bodies such as the United Nations, where they may calculate the economic benefits of “ecosystem services” contributed by the natural environment, or the environmental costs of the world economy.
Most accountants work full time in offices.
What Is the Average Environmental Accountant Salary?
The median annual salary for accountants was $73,560 as of May 2020.
Environmental Accounting Jobs
An environmental accountant is capable of understanding highly technical material such as resource management and outcomes, as well as field research studies, and assign reasonable values under the law in order to satisfy accounting principles to assess disaster evaluation and remediation, asset depreciation/appreciation, or sound investments. Accountants have a set of responsibilities which vary significantly from job to job, but the list here includes typical job duties that are expected:
- Analyze and interpret data obtained from literature reviews, research, and sample findings, imagery, and computer model predictive data
- Analyze historical data and historical issues to formulate a reasonable value for present actions
- Note and analyze ecological and financial trends and cycles; use model data to relay information about future trends
- Explain and illustrate how the environmental event or trend in question may impact a company's balance sheet
- Be prepared to create several hypotheses or ‘possible futures', from most to least conservative and evaluate likelihood even in the face of adversity
- Communicate clearly with stakeholders and administrators on singular environmental incidents or broad environmental trends
- Make internal strategic decisions by identifying, collecting, analyzing, and using environmental and business information for decision-making
- Provide information to external stakeholders on financial performance
- Consult with investors, lenders, and other potential stakeholders
- Prepare reports and perform accounting actions for both for-profit and non-profit organizations
- Assess and assign financial value to a company's tasks, strategies, and past and future impacts/profits
Senior Environmental Accountants often have enhanced job responsibilities that include managing human resources, budgeting, strategy and team collaboration. Such responsibilities often include:
- Source and oversee data analysis from literature reviews, research, imagery, and computer model predictive data
- Intuit issues to formulate a reasonable value for present actions; lead team accordingly
- Note and analyze ecological and financial trends and cycles; prepare and enact ‘best practice' rubric to use in various scenarios
- Oversee the creation of hypotheses or ‘possible futures', from most to least conservative; use intuition and accounting principles to assign value and evaluate likelihood
- Provide information to external stakeholders on financial performance
- Consult with investors, lenders, and other potential stakeholders
- Prepare reports and perform accounting services
- Assess and assign financial value to a company's tasks, strategies, and past and future impacts/profits
- Provide consultation to agencies, professionals, or researchers
- Establishing valid and efficient workgroup protocols for a positive and challenging work environment
- Provide mentoring to junior team members
What Is the Job Demand for Environmental Accountants?
According to the BLS, the job demand for accountants is projected to increase by 7 percent between 2020 and 2030.* As focus on environmental degradation and sustainability grows, positions for environmental accountants in particular will likely grow along with it.
What Do Environmental Accountants Study?
Most accounting jobs require at least a bachelor's degree in accounting. Some positions require a master's degree. A few schools offer programs in environmental accounting specifically, particularly at the graduate level.
Related Degree Options for Environmental Accountants
Environmental Accounting Certification
Any accountant filing a report with the U.S. Securities and Exchange Commission must be certified as a Certified Public Accountant (CPA). Many other accountants pursue certification to enhance their credentials, gain more clients, or improve their opportunities for advancement.
CPAs are licensed by their state's Board of Accountancy. In most states, certification involves a minimum of a bachelor's degree, passing a national exam, and showing relevant work experience. Most states require CPAs to participate in professional development to keep their licenses.
An environmental accountant can also become a Certified Professional Environmental Auditor (CPEA) through the Board of Environmental, Health and Safety Auditors Certifications. A certification specialty in environmental compliance is available. This certification is recognized by EPA and the Department of Energy. Like CPA certification, CPEA certification requires a bachelor's degree, passing an exam, and demonstrating relevant work experience.
What Kind of Societies and Professional Organizations Do Environmental Accountants Have?
- The American Institute of CPAs is a preeminent professional association for accountants. It hosts a portal on Sustainability Accounting and Reporting on its website.
- The Association of Accountants and Financial Planners in Business hosts several publications on sustainability and environmental accounting on its website.
*2020 US Bureau of Labor Statistics salary figures and job growth projections for accountants and auditors reflect national data not school-specific information. Conditions in your area may vary. Data accessed September 2021.
