Why an Environmental Accounting Degree?
Environmental accountants calculate the environmental costs of business activity, as well as business costs incurred by environmental regulations and voluntary programs. By tracking a business's effects on the environment, they give managers opportunities to reduce or eliminate costs. Environmental accountants also suggest alternative supply chains, processes, and other options that may reduce business expenses and environmental damage at the same time. Some also account for “environmental assets” such as pollution allowances and revenue-generating waste streams. Environmental accounting is sometimes referred to as “total cost accounting” or “whole cost accounting.”
Environmental Accounting Areas of Specialty
Environmental Management Accounting (EMA) - EMA deals with internal reporting to company management. EMA tracks environmental assets, expenses, and liabilities, to help managers make better decisions about supply chains, capital investments, industrial processes, and more.
Financial Accounting (FA) - Financial accounting deals with external reporting to investors, the government, and other stakeholders. Environmental financial accounting reports on environmental liabilities, assets, and programs to these stakeholders. For this reason, it is more formal than EMA. Financial accounting follows Generally Accepted Accounting Principles (GAAP).
National Accounting (NA) - NA involves collecting and analyzing information on national income and health. Environmental national accounting reports on countries' environmental health and natural assets, and the activities and conditions that threaten them.
Environmental Accounting Undergraduate Programs
Most accounting jobs require at least a bachelor's degree in accounting. However, environmental accounting is a still-emerging, specialized field; the Association for the Advancement of Sustainability in Higher Education (AASHE) does not list any undergraduate degree programs in environmental accounting. Most students start out with generalized bachelor's degrees in accounting. Afterwards, they can choose to participate in a sustainable business program at the graduate level.
Alternatively, high school students interested in both business and the environment can choose from an increasing number of undergraduate degrees and concentrations in sustainable business, they may not cover accounting in as much depth.
Texas A&M University offers a Certificate in Energy Accounting for undergraduate students seeking careers in the energy industry. To complete the certificate program, students must complete ACCT 327 (Intermediate Accounting), ACCT 403/603 (Energy Accounting), ACCT/FINC 484 (Internship), BUSN 302 (Energy Industry), and an approved energy-related elective in a non-business discipline, such as environmental science or geology. The certificate program offers opportunities for interdisciplinary study and real-world experience, and sets graduates apart.
Aquinas College in Grand Rapids, Michigan offers a B.S. in Sustainable Business that integrates business courses and the natural sciences. Its Environmental Economics and Policy course covers environmental accounting, externalities, contingent valuation, and other environmental accounting concepts. It also offers courses on building social capital, sustainable business innovations, financial management, and industrial ecology.
Environmental Accounting Certification
New accounting and sustainable business graduates may need to earn professional certification. Any accountant filing a report with the U.S. Securities and Exchange Commission must be certified as a Certified Public Accountant (CPA). Many other accountants pursue certification to enhance their credentials, gain more clients, or improve their opportunities for advancement.
CPAs are licensed by their state Board of Accountancy. In most states, certification involves a minimum of a bachelor's degree, passing a national exam, and showing relevant work experience. Most states require CPAs to participate in professional development to keep their licenses.
An environmental accountant can also become a Certified Professional Environmental Auditor (CPEA) through the Board of Environmental, Health and Safety Auditors Certifications. A cer-tification specialty in environmental compliance is available. This certification is recognized by EPA and the Department of Energy. Like CPA certification, CPEA certification requires a bachelor's degree, passing an exam, and demonstrating relevant work experience.
Graduate Certificates in Environmental Accounting
There are currently no graduate certificate programs in environmental accounting. However, college graduates with general accounting degrees can opt to expand their “green” credentials with a graduate certificate in sustainable business.
Master's Degrees in Environmental Accounting
At the current time, environmental accounting mainly refers to a type of accounting or career path, rather than a degree program. Some universities offer Green MBAs, MBAs in Sustainability, and Masters of Environmental Management that include coursework in environmental accounting.
Marylhurst University, for example, offers an Online MBA in Sustainable Business that includes core courses in managerial and environmental accounting, as well as finance and sustainability, resource economics, and sustainable marketing. Students choose from concentrations in renewable energy, operations management, alternative and renewable energy, green development, and food systems management. There are also sustainable capstone courses.
Doctoral Programs in Environmental Accounting
While there are currently no Ph.D. programs in environmental accounting in the United States, aspiring doctoral candidates can choose programs with faculty conducting research in this area. These faculty members can serve as advisors who guide independent student research.
The University of North Texas has one faculty member interested in research on environmental accounting. Applicants must be sure to communicate with potential advisors before selecting a program.
RMIT University in Australia offers a Ph.D. of Accountancy. Its program specializes in business research in accounting, auditing, financial accounting, and social and environmental accountability.
Working as an Environmental Accountant
Most EMAs and FAs work for resource-intensive private companies such as mining, manufacturing, and energy firms. Government agencies and industry associations also employ accountants to tally the costs of regulations and pollution prevention measures. Others do national accounting for nonprofit organizations and federal agencies.
Accounting jobs are projected to grow at an average rate of 8%-14% through 2022. Increasing focus on climate change, energy, and other environmental issues are likely to increase employment in environmental accounting.