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Accounting and the Environment

Accounting and the Environment. Anna Caulder Drew Frey Valerie Pagani Arun Sundaram. Deepwater Horizon Oil Spill. April 20, 2010 Well leaked ~50,000 barrels a day into Gulf of Mexico, 206.2 million gallons total BP’s estimated price tag = $40 billion

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Accounting and the Environment

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  1. Accounting and the Environment Anna Caulder Drew Frey Valerie Pagani ArunSundaram

  2. Deepwater Horizon Oil Spill April 20, 2010 Well leaked ~50,000 barrels a day into Gulf of Mexico, 206.2 million gallons total BP’s estimated price tag = $40 billion https://www.youtube.com/watch?v=QiF-X-Ez9Bs http://www.greenpeace.org/international/en/multimedia/slideshows/Deepwater-Horizon-Oil-Rig-Disaster/

  3. History of Environmental Accounting • 1992 - Conference on Environment and Development in Brazil • Agenda 21 • 1998 - INTOSAI Working Group on Environmental Auditing • 2003 – System of Environmental and Economic Accounting (SSEA) http://legal.un.org/avl/images/ha/ccc/04-l.jpg

  4. GDP & Environmental externalities • Welfare and economic growth is currently measured by GDP • GDP does not accurately account for environmental externalities • Private Costs < “Social” Costs Upper Safety Limit http://www.global-greenhouse-warming.com/images/CO2CH4N2OGasesConcentrations.jpg?aba085

  5. Alternative measures • Genuine Progress Indicator • Measures value instead of money spent. • Accounts for nonmonetary factors • Environmental degradation • Pollution • Crime • Poverty Rate http://newparadigmdigest.com/wp-content/uploads/2011/06/GPI_graph_for_IJEC.jpeg

  6. Environmental Reports New Value Creation 2009 Study by Thomas Reuters 82% of investors evaluate environment, social, and governance criteria as part of their investment decision Included in Annual Reports http://images.apple.com/environment/reports/docs/iPad_wRetinaDisplay_PER_Mar2014.pdf​

  7. Regulations • Contingencies • Environmental Reports • Traditional vs. New Methods • National Asset Trust Model http://www.southernfriedscience.com/?p=11692 http://www.wwf.org.za/?5181/Environmentjeopardisedbyeconomicbail-outplanwarnsWWF

  8. Walmart Corporation http://corporate.walmart.com/global-responsibility/environment-sustainability/global-responsibility-report

  9. Utilitarian Accountant • Zero-sum equation? • Current generation uses natural resource at expense of future generation • Advances in technology? http://www.sandiegohistory.org/journal/75summer/images/pg50.jpg

  10. Kantian Accountant • Duty to Sustainability • Individual Responsibility to community • Focus on intent of actions, not the outcome http://smilepolitely.com/images/uploads/culture/2010/june/9/Cartoon.jpg

  11. Virtuous Accountant • No fear of personal financial loss • Self-Interest • Independent and Impartial • Lobbyists • Businessmen • No extreme asset valuation http://straighttalkinmountvernon.typepad.com/straighttalk/2013/08/self-convicted-serial-racist-rogue-judge-mark-gross.html

  12. Our Views

  13. References Boisson De Chazournes, Laurence. "United Nations Framework Convention on Climate Change - Main Page." United Nations Framework Convention on Climate Change - Main Page. United Nations, n.d. Web. 20 Apr. 2014. <http://legal.un.org/avl/ha/ccc/ccc.html>. Herath, G. (2005). Sustainable development and environmental accounting: The challenge to the economics and accounting profession. International Journal of Social Economics, 32(12), 1035-1050. Retrieved from http://exproxy.lib.vt.edu Morphy, Erika. "Green Accounting: A Greener Bottom Line?" Forbes. Forbes Magazine, 07 Oct. 2012. Web. 20 Apr. 2014. <http://www.forbes.com/sites/erikamorphy/2012/10/07/green-accounting-a-greener-bottom "Oil from Deepwater Horizon Disaster Entered Food Chain in the Gulf of Mexico." ScienceDaily. ScienceDaily, 20 Mar. 2012. Web. 20 Apr. 2014. <http://www.sciencedaily.com/releases/2012/03/120320142100.htm>. Senge, S. V. (1993). Accounting for the Environment: An analysis of issues. Ohio CPA Journal, 52(1), 33. Retrieved from http://ezproxy.lib.vt.edu

  14. Questions?

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