Environmental Accountants Do It for the Green

Environmental Accountants Do It for the Green

Accountants can do more than count beans and push back against the occasional executive who wants to borrow a few hundred million from petty cash. When financial geniuses specialize in environmental accounting, they'll find themselves analyzing internal and external costs of environmental impacts and sometimes jumping up and down to get the attention of executives who'd rather stick their heads in the sand. 

Environmental accounting, since the 1960s the province of governmental technical-assistance agencies, has in recent years spread into the private sector, where pressure to cut costs has invaded every niche of business operations. The environmental accountant can help the bottom line by analyzing the costs of pollution prevention in a manufacturing operation and comparing those numbers against the costs of lesser, cheaper forms of abatement -- costs that could include missed opportunities for tax credits, fines and even bad blood with the neighbors.

"For Fortune 500 companies, environmental management is an ongoing responsibility for accountants and others assigned to control risk," says Murphy Smith, CPA, a professor of accounting at Texas A & M University in College Station, Texas. 

For career seekers, environmental accounting is an opportunity to get into finance, a field about as secure as they come, while making a difference in a world facing various ecological threats. 

Three Flavors of Environmental Accounting

There are three major areas of specialization in environmental accounting:

  • Environmental management accountants collect and analyze information on materials flows and pollution controls for an internal audience of executives. 
  • Environmental financial accountants make analogous reports to external audiences, including investors and regulators.
  • Environmental national accountants look at a much bigger picture, analyzing how natural resources are used and how environmental impacts are managed across the nation. 

Environmental accounting is something of an outlier in the broad field of finance. There are no academic programs focusing on environmental accounting, nor is there a professional credential for the specialty. 

"Companies don't specifically recruit for environmental accountant positions," Smith says. "In most cases, students get a job and learn the basics of a company, then specialize in this area." Most accountants have earned their CPA credential before taking a job in the environmental area.

Large companies often have environmental accountants on staff, as do accounting firms, government technical-assistance agencies and nonprofits. The US Environmental Protection Agency, for example, has been a driving force in environmental accounting, as evidenced by the agency's publications.

Cross-Functional Skills

More so than the average accountant, environmental accountants must be able to work with professionals from a wide range of disciplines, including scientists, risk managers, regulatory specialists, public relations professionals and senior executives. 

"The environmental accountant has to be an excellent communicator," says Robert Pojasek, an East Arlington, Massachusetts, management consultant specializing in environmental issues. Ultimately, when these specialists work in the private sector, they must accept the fact that they serve the bottom line. "The environmental accountant needs to be cognizant that traditional accountants do run the business," he says. 

Job Demand and Politics

Environmental protection is always a hot-potato issue in Washington, DC. For that reason, the demand for environmental accountants may be subject to the politics of the moment, according to Pojasek. The administration of George W. Bush slowed the pace of environmental regulation, he says. "When no new regulations come out, there are not a lot of incentives to try to prevent pollution," he says. If there are fewer incentives, corporations may be likely to hire fewer environmental accountants.

But some observers believe corporate America's enlightened self-interest in sustainable practices could reduce the influence of politics on environmental management. "The more that industry is able to justify environmental programs on the basis of financial self-interest, the lower the financial, political, and other burdens of environmental protection on government," according to the Environmental Management Accounting Research and Information Center.

If you pursue a career in environmental accounting, you may find yourself at the center of these important issues.

Learn more about environmental careers.