Green Accounting for Sustainable Development in India

Abstract

A change in the environment is a global problem which needs a global solution. Taking care of environment is a big challenge for all the countries. Green accounting system incorporates both economic and environmental information. This accounting method is considered as an important tool to understand the important role played by the corporate unit for environmental safety and welfare. It actually measures the potential or actual impact which is created by a company on an environment in terms of nominal or monetary basis. This paper is based on secondary data which is collected by published works, articles and journals. This paper aims to explore the need and issues in implementation of green accounting system in India for the development of sustainability.

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Wednesday, October 2021
th
27
on
VIRTUAL INTERNATIONAL
CONFERENCE 2021
Make In India : Redefined In A Digital
Era for Sustainable Development
G R DAMODARAN
ACADEMY OF MANAGEMENT
(Approved by the All India Council for Technical Education
affiliated to the Bharathiar University and recognized by the UGC)
An ISO 9001: 2015 Certified Institution
Avinashi Road q Neelambur q Coimbatore – 641 062 q Tamilnadu q India.
Phones : 0422 - 2626206 q 2626207 Mobiles : 98422 21409 q 98422 21142
Fax : 0422 - 2625188 q E-mail : grdam@grd.edu.in
Website : http//www.grd/org.grdam//
Organised by the
ISBN : 978-93-91286-12-5

VIRTUAL INTERNATIONAL CONFERENCE
ON
MAKE IN INDIA : REDEFINED IN A DIGITAL ERA
FOR SUSTAINABLE DEVELOPMENT
G R DAMODARAN
ACADEMY OF MANAGEMENT
(Approved by the All India Council for Technical Education
affiliated to the Bharathiar University and recognized by the UGC)
An ISO 9001: 2015 Certified Institution
Avinashi Road q Neelambur q Coimbatore – 641 062 q Tamilnadu q India.
Phones : 0422 - 2626206 q 2626207 q Mobiles : 98422 21409 q 98422 21142
Fax : 0422 - 2625188 q E-mail : grdam@grd.edu.in
Website : http//www.grd/org.grdam//
Organised by the
th
WEDNESDAY, 27 OCTOBER 2021

G R Damodaran Academy of Management, Neelambur, Coimbatore
Virtual International Conference on 'Make in India : Redefined in a Digital Era
th
for Sustainable Development' held on 27 October 2021.
17 Analysis & Recommendation of Good Books
- Mr. Jagadeesan D, Ms. Sathya D And Ms. Pavithra N. . . . . . . . . . . . . . . . . . . 103
18 Analysis on Global Digital Marketing Management & Environment
- Ms. T.N.P. Nalini, Dr.N.Sathiyendran and Dr. V. Gowtham Raaj . . . . . . . . . . . 108
19 Statistical Analysis for Comparison Between Organic & Chemical Fertilizers
- Dr. Prakash Rajaram Chavan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
20 Customer Satisfaction towards Online Shopping Sites for Baby Products
- Dr. P. Anitha & Ms. T. Ramya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
21 Overview - E-Tailing Market
- Dr. S. Raja Sharmila & Ms. V. Mythili . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
22 A Study on Green Human Resource Practices & Employee Engagement
- Ms. Deepika. M & Dr. E. Veronica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
23 A Study on Attitude towards Monthly Savings of Textile Shop
Employees in Kovilpatti
- Dr. S. Venkatachalam & Mr. M. Siva Kumar . . . . . . . . . . . . . . . . . . . . . . . . . . 132
24 Challenges & Opportunities of Rural Entrepreneurs in India
- Ms. N. Paramesswari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
25 An empirical study of financial inclusion and its impact on
women empowerment in rural areas
- Dr. E. Kalaivani, Ms. C. Dharani & Ms. M. Santhiya . . . . . . . . . . . . . . . . . . . . 145
26 A Study on the Factors influencing Leadership Self Efficacy & Their
Effect on the same among the Employees within the Manufacturing
Engineering Industries
- Ms. S. Sharmila and Dr. B. Sripirabaa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
27 Study on Make in India- AI & Automation
- Mr. P. Sabareesh, Ms. S. Dharani & Ms. V. Gokila . . . . . . . . . . . . . . . . . . . . . . 162
28 Green Accounting for Sustainable Development in India
- Ms. Gomathi A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
29 Renewable Energy & Make in India Opportunities
- Ms. J. Poornima & Dr. M. Elumalai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
30 How to use Digital Marketing to bring Targeted Traffic to your Website
- Mr. Mayur D Mali & Ms.Gauri S Pawar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
31 The Effect of Diversity on Organisational Growth
- Dr. Padmaavathy. PA & Ms. Asha Elizabeth Kurian . . . . . . . . . . . . . . . . . . . . . 184
32 Users Perception towards Paytm
- Dr. P.Jayanthi and Dr. S.Poongodi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
33 An Analysis of Factors influencing the Implementation of TQM in
Manufacturing MSMEs
- Mr.V. Vivek & Dr. K. Chandrasekar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
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ABSTRACT
A change in the environment is a global problem which needs a global solution. Taking care of
environment is a big challenge for all the countries. Green accounting system incorporates both
economic and environmental information. This accounting method is considered as an important tool
to understand the important role played by the corporate unit for environmental safety and welfare. It
actually measures the potential or actual impact which is created by a company on an environment in
terms of nominal or monetary basis. This paper is based on secondary data which is collected by
published works, articles and journals. This paper aims to explore the need and issues in
implementation of green accounting system in India for the development of sustainability.
Key Words: Natural resource Accounting, Green Accounting, Environmental Accounting, Ecological
Accounting, Sustainability
INTRODUCTION
Environmental accounting is considered as a major thing for all developed and developing nations. To
maintain sustainable development, all the nations are concerned about this. It was first introduced
by Professor Peter Wood in the year 1980s. It deals with three factors that is planet, people and profit.
For the need of sustainability and the safety of future generation environmental accounting is taking
importance in the present scenario.
The term “Corporate Social Responsibility” is coined by Howard Bowens' book named as “Social
Responsibilities of a Businessman (1953)” and Rachel Carsons' book “Silent Spring (1962)” focuses
on the issue of environmental protection and sustainability.
RESEARCH DESIGN OF THE STUDY
The present paper is an attempt to appreciate the nuances of green accounting and to study the
implication of usage of green accounting for environmental sustainability. This study is descriptive in
nature. It has been done based on secondary data.
OBJECTIVES OF THE STUDY
The following objectives are reviewed in this study
1. To review the origin and necessitate of green accounting in India.
2. To explore the role of green accounting in sustainable development.
3. To examine the legal rules adopted in India for environmental sustainability.
4. To explain the various issues relating implementation of green accounting.
REVIEW OF LITERATURE
Alka Solanki (2016) carried out a research on 'A Study about Green Accounting: its Importance and
Concept'. The main purpose of this paper is to study and analyze the available literature and reveals
the opinion of various authors regarding importance and concept of green accounting. This paper
GREEN ACCOUNTING FOR SUSTAINABLE
DEVELOPMENT IN INDIA
Ms. Gomathi A,
Assistant Professor, Department of Commerce, Nallamuthu Gounder Mahalingam College,
Pollachi, Tamil Nadu, India
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G R Damodaran Academy of Management, Neelambur, Coimbatore

reveals the concept, need, advantages and limitations of green accounting for developing India. The
author concludes that the green accounting concept is highly essential to enact laws and provisions
in policy framework.
Ali Mustafa Magablih (2017) conducted a study on 'The Impact of Green Accounting for Reducing the
Environmental Cost in Production Companies in Jordon'. This study is based on both primary and
secondary data. 155 questionnaires were collected from financial managers of various production
companies in Jordon. This study aims to explore the need for environmental cost accounting,
methods of measurement, analysis of the elements of the environmental costs and statement of the
role of the advanced methods of production in the presence of environmental costs. The author
analysis potential causes of pollution through the six main phases in product life cycle.
Vandna (2018) entitled a study on 'Green Accounting' with the aim of explaining the concept of green
accounting, various forms, scope, application terms and process of environmental accounting in
India. The study is descriptive in nature. The author also explains the various methods of measuring
environmental liabilities, capitalization of environmental expenditures and the legal framework
adopted for green accounting in India and International level.
Dr. Varsha Agarwal and Kalpaja L (2018) carried out a research on 'A Study on the Importance of
Green Accounting' with the aim of understands the need of green accounting to every organization
and the role of corporate social responsibility (CSR) activities. Data are collected primary in nature for
understanding people's perspectives towards green accounting. In this study the authors attempt to
reveal the necessity of implementing green accounting in corporate level for environmental
sustainability. Finally they conclude with the necessary initiatives which should be taken by the
Government in policy making.
Mr. Manoj Yadav - Assistant Manager of Civil in L & T construction, published a paper (2018) based on
available literature in green accounting, named as 'Green Accounting a Review Paper'. The main aim
of the author is to examine the implication of green accounting in economics and environmental
accounting practices in India. In this paper author explains the need of legal framework for green
accounting practices.
N. Anil kumar et al. conducted a descriptive research on 'A Study on Green Accounting and Its
Practices in India'. This study aims to provide the accurate quantitative information on volumes and
economic effects to people and identify that the part of Gross Domestic Product. In additional to that
the authors analyze and assess the environmental cost and benefits of this accounting.
Need of Green Accounting in Sustainable Development:
Bio diversity is foundation of ecosystem of the earth. India occupies 2.4% of the world's area and is
host to 7% of the global biodiversity, accounting for 8% of the world's mammals, 13 birds, 6 reptiles,
4% amphibians, 12 fish and 6 % of flowering plants (Manoj Yadav 2018).
Without environmental accountability the organization will not succeed in a profitable manner. For
increasing harmful effect of environment pollution, the more importance is credited not only to
financial aspects but also in the social and environmental aspects. In recent generation the
organizations not only view the accounting but also it should also focus on responsibility and
sustainable development in their strategies and operations. Environmental sustainability denotes
the potential longevity of vital human ecological support system, forestry, industry, system of
agriculture, fisheries. It also includes the increasing pressure by human communities, their
consumption patterns and their impact on various system etc., Based on the foregoing, all the
organization not only focuses on increasing the profit but also it should take the necessary steps for
the negative impact of the operating which is carried out and it is demanded to product the
environment with sustainability.
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G R Damodaran Academy of Management, Neelambur, Coimbatore

There are being developed a large number of indicators by all the countries for assisting the
sustainable development. The changes in the quality of environment resulting from pollution and
other impact of production, consumption and natural events have to identified and rectified The main
objectives of Green Accounting are
1. Segregation and Elaboration of all environmental resources.
2. Linkage of physical resource accounts with monetary environmental accounts.
3. Assessment of environmental costs and benefits.
4. Accounting for the maintenance of tangible wealth
5. Elaboration and measurement of indicators of environmentally adjusted product and income.
Types of Green Accounting System
Green accounting system is a new challenge of accounting system. Currently it functions as an
auxiliary sub-system to the traditional accounting system. To overcome the environmental challenge
which is already going on in the society, changes in accounting system based on environment
resulted from the necessity to modify the System of National Accounts (SNS) in world wide.
1. Environment Management Accounting (EMA)
2. Environmental Financial Accounting (EFA)
3. Environmental National Accounting (ENA)
Green Accounting in India
Every nation has the responsibility to protect the environment and also promote the economic
development. In India through the new companies Act 2013 it became mandatory for all the concerns
to follow the green accounting as CSR activities for the survival of environment.
For that purpose companies are classified into three types the companies which is having a net worth
of INR 500 crore, the companies having net profit of INR 5 crore or the companies having turnover of
INR 1000 crore. A concern which falls in these categories must spend at least 2% of its average net
profit of the last three years on CSR activities.
The Government of India established the NITI Aayog to attain the sustainable development goals.
Most of the countries are still unaware of green accounting, in India there is some initiative steps
taken by the government as well as by the companies. But until now there is no clear idea about the
planning, practices and strategies should followed for the environmental sustainability.
Legal Rules related to Green Accounting for Sustainable development
Sustainable development is development that meets the needs of the present without comprising the
ability of future generation1. Green accounting system measures the sustainable income level that
can be secured without decreasing the stock of natural assets. With the effect of waste management
and cost analysis the green accounting is played a vital role in each and every organization. In India
Chief Ministry of Environment with the objective of increasing concern with the production of
environment and taking anti-pollution measures. A part from this Environment Improvement Trust
(EIT) has been working for environmental and forest protection since 1998. A group of volunteers
works with the goal of Green and Clean India concept.
Act related to Environment:
1. The Factory Act, 1948
2. Merchant of Shipping Act, 1958
3. Water (Prevention and Control of Pollution) Act, 1974
4. Water (Prevention and Control of Pollution) Cess Act, 1977
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G R Damodaran Academy of Management, Neelambur, Coimbatore

5. The Forest (Conservation) Act, 1980
6. The Air (Prevention and Control of Pollution) Act, 1981
7. The Environment (Production) Act, 1986
8. Indian Fisheries Act 1987
9. Hazardous Waste (Management and Handling) Rules, 1989
10. Motor Vehicle Act, 1991
11. Public Liability Insurance Act, 1991
12. The National Environment Tribunal Act, 1995
13. Water Biomedical Waste (Management and Handling) Rules, 1998
14. Municipal Solid Wastes (Management and Handling) Rules, 2000
15. Ozone Depleting Substances (Regulation and Control) Rules 2000
16. Noise Pollution (Regulation and Control) Amendment Rules 2002
17. Biological Diversity Act 2002.
Goals of Sustainable Development
The collection of 17 global goals which is used for sustainable development is set by the United
Nations General Assembly in 2015 for the year 2030 is considered as an important role. The following
aspects are mainly considered in sustainable development goal. No Poverty, Zero Hunger, Good
Health and Well – being, Clean Water and Sanitation, Gender Equality, Quality Education, Decent
Work and Economic Growth, Industry, Affordable and Clean Energy, Reducing Inequality,
Sustainable Cities and Communities, Industry, Innovation and Infrastructure, Responsible
Consumption and Production, Climate Action, Life Below Water, Life on Land, Peace, Justice and
Strong Institutions and Partnerships for the Goals.
Source: https://en.wikipedia.org/wiki/Sustainable_development
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G R Damodaran Academy of Management, Neelambur, Coimbatore

Role of Green Accounting in measuring Economic Development
The economic growth of a nation is identified based on many indicators including GDP. When the GDP
concept was developed between the year of 1930 and 1960, the environmental resources were
considered as a free gift of nature and it did not have any market price. GDP measures the value of
output produced within a country over a certain period of time, if there any depreciation
measurement the man made capital only accounted, it may not consider the exhaustion of natural
capital such as water, land, forest and the negative effects of health and welfare like pollution. It may
give the way to many flaws of GDP calculation. So there is a necessity to improve the GDP and
maintain environmental sustainability of every nation. In green accounting the relationship between
the GDP and the environmental resources has highly reviewed and the gap between these two is
identified and rectified by accounting that resources.
Issues in Implementation of Green Accounting
While assigning the value to these resources there is big challenge has to be faced by all the countries
and all the industries. Because of there is no uniformity in landscape and also the operations of the
industries. Evaluating the natural resources may vary to one country to another based on their
environmental condition, operation of business and usage of natural resources. Various types of
research process have to be followed in this topic. While comparing the usage of green accounting it
may be good in the sense of conceptual work but practically it has a number of difficulties.
Environmental accounting involves the assessment and disclosure of environmental-related
financial information. It includes physical and monetary information actually involved in particular
environment. Resources may be classified as renewable and non-renewable. While using these
resources the industry has to calculate the internal and external cost categories. As well as the
industry must calculate the internal and external benefits such as saving from new technologies
resulting in lower pollution, substitute raw material, new markets and inventions etc., which could be
giving benefit to society as well as industries and it should be monetarily measured. An industry has
to account the cost of avoiding the damage in environment instead of making remedial activities
which deals with the raw material of air, water, land and energy.
FINDINGS
Converting qualitative data into quantitative one is very large and long process so based on these
result drawing conclusion is not easy. Until now there is no authorized format is introduced by any of
the country. Even though Indian corporate comply with the rules and regulations with regard to
environmental protection, till now no clear cut policies are framed and formulated at the National,
State or even at the company level, for ensuring the level of compliance to environmental norms. There
are several challenges of Green accounting and reporting such a Green accounting method, social
values in applicable assumptions, economic value and lack of reliable industrial data. Green
accounting involves estimation of environmental expenditures/cost, capitalization of those
environmental expenditures and identification of environmental liabilities and measurement of
environmental liabilities.
SUGGESTIONS
Numerous valuation techniques are needed for assigning the market price to the environmental
resources. To find the safe limits of eco degradation the exact and careful assessment should followed
by every concern. The concern must reveal its environmental accounting information in the annual
report and corporate brochure. There is a need for more environment legislations, norms and
bureaus. Charted accountants suggested that all the concerns should follow the green accounting.
There is a need to create awareness regarding environmental accounting and reporting to business
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G R Damodaran Academy of Management, Neelambur, Coimbatore

groups and the general public. For maintain environmental expenditures a separate account should
be opened. It will help to measure and report environmental expenditure and environmental
performance of each company as well as the whole sector. Corporate institutions must create an
accounting standard for green accounting and reporting practice. Reporting should be made
compulsory for all manufacturing industries. Environmental related costs, liabilities and
expenditure should be determined by the proper accounting methods.
CONCLUSION
Environmental accounting has played a key role all over the Globe but in India it is in preliminary
stage. Though there is a lot of criticism in the implementation of green accounting there is necessity to
save the environmental resources and maintain the sustainability. India has many adverse factors
like overpopulation, natural calamities, pollution, exhausting the natural resources, deforestation
and many environmental hazards. For safe environment it is essential to enact laws and make
provisions to implement the environmental accounting. Regarding its importance the proper
awareness should be given by the government for the industries as well as individuals. While making
policies the government should consider the changes in traditional accounting nature.
REFERENCE
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Accounting, Auditing and Accountability Journal. 17(5), pp. 731-757.
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in production companies. Journal of Modern Accounting and Auditing, June 2017, Vol.13, No.
6, 249-265
3. Alok kumar, pramanik (2002). Environmental Accounting and Reporting. Soujanya Books,
Delhi.
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ISSN: 2278 – 487X, p-ISSN : 2319 – 7668 pp 30-34 at www. iosrjournals.org
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8. https://en.wikipedia.org/wiki/Sustainable_development
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G R Damodaran Academy of Management, Neelambur, Coimbatore