Question ahmad Finance & Economics

Advantanges of using social and environmental accounting.

Advantages for an organization which undertakes social and environmental accounting.

Did you know that we write custom assignments? We have experts in each specific subject area with vast experience. Get a complete answer and find out more about our writing services.

Answer Internal Staff

Social and Environmental accounting are ways of measuring a firm’s performance which extend the traditional financial accounting, to include social and environment effects. In particular, Social accounting places emphasis on how an organisation has an impact on the people, the planet and the way in which resources are used (socialauditnetwork,2016). On the other hand, Environmental accounting focuses more on a firm’s use of resources and measures the cost of a firm’s impact on the environment.

Both forms of accounting may be used by any company; from any industry or size, whether it operates in the private or the public sector (socialauditnetwork,2016).

There are a number of advantages to the firms that undertake Social and Environmental accounting, some of which include:

  • These forms of accounting serve to provide information needs to the variety of stakeholders, both internal and external stakeholders of a business (ACCAglobal,2015).
  • It may strengthen a firm’s accountability to their shareholders by providing more information (ACCAglobal,2015).
  • Firms that are considered to have significant environmental impact such as firms that operate in the oil, gas industry, use social and environmental accounting as a way to communicate and respond to any specific challenges related to the environmental concerns being faced and how they are being dealt with by the company (ACCAglobal,2015).
  • Companies may use social and environmental accounting to further improve their reputation as an ethical and responsible company
  • Unlike traditional methods of performance measurement that focus only on financials, social accounting allows firms to disclose any qualitative information that may be relevant and of importance to the stakeholders (ACCAglobal,2015).
  • It can help management identify areas in which a company can minimise any negative impacts on the environment.


ACCAglobal (2015) Environmental accounting and reporting. Available at: (accessed on 22/6/2016)

SocialAuditNetwork (2016) What is Social Accounting and Audit. Available at: (accessed on 22/6/2016)