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Environment Sensitive Accounting is need of the hour: Research
A leading refereed research journal in area of Financial Management published since 1987, rated 3rd Best World Wide by American Statistical Association, acknowledged internationally and abstracted / indexed by over 25 international agencies.
THE CURRENT financial accounting framework in India appears to be ill-equipped to provide the information required by various internal and external stakeholders on environmental costs and liabilities, environmental risks involved in their investments, social costs or externalities and steps taken by the companies to reduce global warming and improve sustainability says a research. The  study was published in the latest issue of Finance India Vol. XIV No. 3, September, 2010.
 
The research titled “Need for Environmentally Sensitive Accounting in Corporate Sector in India” done by Dr. Shuchi Pahuja, Associate Professor, University of Delhi, identifies some significant environmental accounting issues and suggests a conceptual framework for environmental accounting and Reporting (EAR) in India.
 
The paper also emphasizes the need for environmental accounting education in the accounting and managerial professions in India to ensure that environmental issues are properly incorporated in the books of accounts and this information is properly disclosed to the various stakeholders for helping them in making relevant financial, investment and other decisions.
 
Dr. Pahuja opines that increasing attention given to environmental issues by regulatory authorities all over the world and growing public concern about the alarming impact of industrial activities on nature, disastrous consequences of atmospheric pollution, oil spills, chemicals and other toxic discharges and depletion of scarce natural resources have posed many challenges for the accounting profession in India.
 
It has also led to increase of social and legal pressure on companies to reduce adverse environmental impacts of their activities by making use of scarce resources and by using cleaner production technologies thus creating a demand for measuring, monitoring and screening, comparing and benchmarking the environmental performance of these companies.
 
The paper published in Finance India reports how performance of organizations is now being judged not only on their financial results but also with regards to its contribution to protect and improve the environment leading to accounting and disclosure of environmental matters emerging rapidly as an important dimension of corporate accounting and reporting practices.
 
Pahuja also advised the professional accounting bodies and management institutes to play a significant role in providing the Environment Accounting education to help accounting profession in India respond positively to issue of environmentalism and help the companies to deal with environmental matters in the books of accounts and financial statements.

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