Green accounting: Path to sustainable practices

PICTURE this scenario: A real estate developer wins a bid to convert a large swath of forested land into a housing project. On the surface, this seems like a win-win. The housing shortage gets addressed, jobs are created, and the economy gets a boost. But beneath this apparent victory lies a cost: the chirping birds, the rustling leaves and the communities intertwined with this land's history are at risk of vanishing. These environmental and social costs often go unnoticed. As accountants, we can put a spotlight on these hidden costs through the practice of green accounting.

Recent articles in Forbes have highlighted the increasing role of accountants in driving sustainability. According to a 2023 piece from the Forbes Business Development Council, young CPAs are in a unique position to champion sustainability initiatives within their organizations by leveraging their financial expertise to highlight the economic benefits of environmentally friendly practices. Another Forbes article notes that accountants can lead the way in sustainability by incorporating environmental costs into financial statements. This is what green accounting is all about.