ADEKUNLE AJASIN UNIVERSITY

AKUNGBA AKOKO

PROJECT : GREEN ACCOUNTING THEORY

DEPARTMENT : ACCOUNTING

COURSE TITLE : ENVIRONMENTAL

ACCOUNTING

COURSE CODE : ACC 317

GROUP D ;
1. Marku Adeleke Emmanuel 190601138

2. Akinlatun Tolulope Mercy 200601145

3. Jimoh Faruq Babatunde 200601136

4. Idowu Mayowa Samuel 200601064

5. Omojuwa Mercy 190601137

6. Agboola Ayobami John 200601142

7. Osineye Oluwaseyi 190601126

8. Macaulay Vincent Oyindamola 190601125

9. Shittu Fatimah Olajumoke 200601074

10. Adegbule precious Oluwaseyi. 190601131

11.Akinbowale Benjamin Oluwaseun 190601135

12. Anunobi Uchechukwu Janet 200601044

13. Daboku Ayomide Blessing 200601034

14. Apanisile Oluwagbemiga John 190601121

15. Orunkoya George Ayorinde 190601134

16. Adekunle Aminat Boluwatife 200601073

17. Abayomi Olamide Jumoke 200601062

18. Akingboye Oluwaseyi Iyanuoluwa 200601003

19. Kareem omotola Oluwaseun 190601133

20. Ogayemi taofeek olawale 200601150

21. Ajibola Inumidun Rebecca 190601129

22. Ajisogun Hellen oluwayinka 190601124

23 . Asaolu Oluwatimileyin Oladayo 190601122

24. Folahanmi Favour 200601008

25. Egunlusi oluwafemi 200601133

26. Adegoke Oyindamola Elizabeth 190601130

27. Oshin temilade olamilekan 190601132

28. Aremo Damilola Adeniyi 97544741DD

29. Goroth Joan olorunosebi 190601141

30. oyedokun Esther blessing 190601127

31. Adeleye kehinde John 190601128

32. IGE OLUWAPELUMI VICTOR 29758685EA

GREEN ACCOUNTING THEORY
-INTRODUCTION

-IMPORTANCE

-MERITS AND DEMERITS

- CRITICISM AND CONCLUSION

INTRODUCTION
Green accounting theory, also known as environmental accounting or sustainable accounting, is an
emerging concept within the field of accounting that aims to incorporate environmental factors and
social responsibility into traditional accounting practices. Here are some key notes on this theory:

1) The aim of green accounting theory is to go beyond just financial accounting and to include
environmental and social dimensions in accounting analysis and decision-making.

2) Green accounting measures and reports on the environmental and social impact of an
organization's activities, products, and services.

3) The concept of green accounting stems from the recognition that businesses have an impact on
the environment and society, and therefore ethical and social responsibility must be taken into
account in their financial reporting.

4) Green accounting promotes the idea of "triple bottom line" reporting, which takes into account
not only financial performance but also environmental and social performance.

5) The theory encourages businesses to consider the impact of their activities on the natural
environment, and to minimize their negative impact through sustainable practices.

6) Green accounting also helps in identifying costs and benefits of eco-friendly initiatives and thus
facilitates decision-making about resource allocation for those initiatives.

7) However, there are still challenges to implementing green accounting, such as difficulties in
measuring and quantifying environmental effects and the lack of standardized reporting methods.
Overall, green accounting theory serves as an important step towards making accounting practices
more socially and environmentally responsible.

DEFINITION OF GREEN ACCOUNTING THEORY

Green accounting theory is a framework that takes into account the economic, social, and
environmental impacts of economic activity. It emphasizes the importance of considering the
long-term effects of economic decisions, and recognizes that economic growth must be balanced
with environmental sustainability. The goal of green accounting is to provide a more
comprehensive picture of economic activity, one that takes into account the full range of costs and
benefits, including social and environmental impacts.
Green accounting theory is an approach that incorporates environmental considerations in
traditional accounting practices. It aims to integrate the economic and environmental implications
of business activities and provides a framework for businesses to assess their impact on the
environment.

IMPORTANCE OF GREEN ACCOUNTING THEORY

The importance of green accounting theory can be summarized as follows:

1. Environmental responsibility: Green accounting theory promotes environmental responsibility

by allowing companies to account for their environmental impacts while conducting business.

2. Improved decision making: With the information provided by green accounting, decision-makers
can make informed choices about the impact of their actions on the environment and the economy.

3. Resource conservation: Green accounting theory encourages resource conservation by revealing

the cost savings available when companies adopt sustainable practices.

4. Stakeholder engagement: By accounting for their environmental impact, companies can better
engage with stakeholders who may be concerned about environmental issues.

5. Positive branding: Green accounting practices can also help a company improve its brand
image and reputation by showcasing its commitment to sustainability.
 MERITS AND DEMERITS OF GREEN ACCOUNTING THEORY

MERIT :

1. Environmental protection: One of the significant advantages of Green Accounting is that it

promotes environmental protection and sustainability. It helps in reducing the environmental
impact of business activities and emphasizes the importance of using natural resources efficiently.

2. Improved decision-making: Green Accounting helps in creating a more comprehensive and

holistic understanding of a company's economic, environmental, and social impact, which can, in
turn, help in improved decision-making.

3. Stakeholder engagement: Green Accounting ensures that the interests of all stakeholders,
including the environment, are taken into account while making business decisions. This can lead
to better stakeholder engagement and more responsible decision-making.

4. Compliance with regulations: Green Accounting can help companies comply with environmental
regulations by providing a framework for reporting and monitoring environmental impacts.

Demerits:

1. Lack of standardization: One of the significant disadvantages of Green Accounting is that there is
no universally accepted standard for measuring and reporting environmental impact, which can
make it difficult to compare different companies or industries.

2. High costs: Implementing Green Accounting practices can be expensive, especially for small and
medium-sized businesses. The cost of collecting, analyzing, and reporting data can be significant
and may place a burden on these companies.

3. Limited focus: Green Accounting primarily focuses on environmental impacts and may not
address other important social issues, such as labor rights or community engagement.

4. Difficulty in quantifying impacts: There can be difficulty in quantifying the impact of a

company's environmental practices, making it difficult to evaluate whether green accounting
practices are effective or not.
 CRITICISM AND CONCLUSION
Green accounting theory has been criticized on several grounds, including:

1. Lack of standardized metrics: There is currently no widely accepted set of standardized metrics
for measuring environmental performance, making it difficult to compare companies in the same
industry on their environmental impact.

2. Limited scope: Green accounting theory is often criticized for only focusing on environmental
aspects of sustainability, and not necessarily considering social or economic impacts of a
company's actions.

3. Difficulty in assessing long-term impacts: It can be difficult to assess the long-term impacts of a
company's environmental practices, especially as environmental events such as climate change and
biodiversity loss are complex and multifaceted.

4. Challenge of assigning values: Assigning a monetary value to environmental impacts can be

challenging, and some argue that it is impossible to put a price tag on the environment.

5. Lack of accountability: It can be difficult to hold companies accountable for their environmental
impact, especially if there are no clear regulations or penalties in place.

Despite these criticisms, green accounting theory has gained traction as an important tool for
companies to promote environmental sustainability and social responsibility.

Finally, organizations need to use the information gathered through green accounting to make
informed decisions on environmental issues. This can include investment decisions and changes in
operating procedures to reduce the organization's environmental impact.

In conclusion, green accounting theory is an important tool for organizations to assess and account
for their environmental impact. By including environmental factors in their financial reporting,
organizations can make more informed decisions that are economically and environmentally
sustainable.