| Websites With Environmental Accounting Information November 2007 Section I. Introduction. The purpose of this article is to provide links to websites that have relevant and reliable information and data that: 1. Help an accountant ensure the correct accounting for, and reporting of, environmental-related costs, assets, and liabilities; 2. Describe software and other tools, such as insurance, that might be useful to company environmental accounting and management; 3. Present environmental management topics, broader than accounting standards, of possible interest to accounting departments; 4. Present information on company sustainability reports; and 5. Present information on the environmental accounting sections of Japanese company sustainability reports. The intended audience for this article is personnel in accounting departments. And, the hoped for results is to help these personnel efficiently and effectively find information, leading to better departmental performance. The links presented in this article were found by searching the Internet, using the Yahoo search engine, and the following key words: "accounting software" "environmental management" "accounting software" environment "accounting standards" "environmental liability" "accounting standards" "environmental reporting" "accounting standards" disposal "accounting standards" environment "accounting standards" liability "corporate social responsibility" accounting "corporate social responsibility" report "corporate sustainability reporting" accounting "cost accounting" environment "cost accounting" waste "environmental account system" "environmental accounting disclosures" "environmental accounting standards" "environmental accounting system" "environmental accounting" "environmental accounting" software "environmental accounting" system "environmental auditing" "environmental auditing" accountant "environmental cost accounting" "environmental costs" accounting "environmental costs" accounting "environmental costs" management "environmental guidelines" accounting "environmental management" accounting "environmental performance measures" accounting "environmental reporting" "environmental risk" accounting "environmental risks" accounting standards "environmental risks" assurance "environmental risks" attest "environmental value" accounting "green account" "life cycle reporting" accounting "sustainability reporting" accounting FIN 47 accounting FIN 47 disclosure FIN 47 interpretation ISO 14001 The websites found using these keywords were evaluated for the purposes of this article. The selected websites are presented in the following five sections. Section II. Websites that help an accountant ensure the correct accounting for, and reporting of, environmental-related costs, assets, and liabilities. a. Company standards and practices. http://www.advancedenvironmentaldimensions.com/fasb_standards.htm. This link takes you to a site, maintained by Advanced Environmental Dimensions, at which are links to seven Financial Accounting Standards Board standards related to environmental liabilities. Go to “SEC Corner”, above right, on this site, and such information as reported Sarbanes-Oxley control deficiencies related to environmentally-related standards; company financial statement restatements due to environmentally-related standards; and SEC comment letters, rulemaking, and statements can be linked to. Several articles (under Articles) provide environmentally related accounting standards information. http://www.aicpa.org/pubs/jofa/dec2001/hiner.htm. This link takes you to a Journal of Accountancy article, which provides an explanation of the standard FAS 143 for accounting for asset retirement obligations. This standard creates a requirement to recognize a liability for end-of-life retirement costs, which needs to include any environmentally related retirement costs. http://acct.tamu.edu/smith/env_acct/Acctenv.htm. This link takes you to a Dr. L. Murphy Smith site, at which is an overview of various environmentally related accounting standards, and what the standards require with respect to environmentally related accounting and reporting. http://www.abanet.org/buslaw/newsletter/0045/materials/pp4.pdf. This link takes you to an article (PDF file), written by Lawrence P. Schnapf, which provides interpretations on how and when to apply various accounting standards to specific environmentally related costs and liabilities. http://www.abanet.org/environ/committees/environdisclosures/newsletter/jul06/envdiscl0706.pdf. This link takes you to a American Bar Association newsletter (PDF file), at which is discussion, by panelists, on the interpretation of FAS 143 and FIN 47, as to their applications in the accounting and reporting of environmentally related events and conditions. Advise is provided on how companies should approach potential accounting for environmentally related issues. http://www.icaew.co.uk/viewer/index.cfm?AUB=TB2I_32513. This links takes you to a 1996 report, from the Institute of Chartered Accountants in England & Wales, on environmental issues in financial reporting. Issues dealt with include: accounting for environmental costs; accounting for environmental liabilities; contingent environmental liabilities; and asset impairment. b. Government standards. http://www.fasab.gov/aapc/aapctr2.pdf . This link takes you a US Office of Management and Budget report (PDF file), at which is discussed how government entities should determine whether a liability for environmental cleanups exist for the entity. Section III. Websites that describe software and other tools, such as insurance, that might be useful to company environmental accounting and management. These tools relate to issues, which a company might have with their environmental management and costs. These tools might be of potential use within the company to help in the accounting and management of environmentally related costs, liabilities, and reporting. a. Software and management systems. http://www.esp-net.com/Home/tabid/36/Default.aspx. This link takes you to the website of a company (ESP) that sells software intended for use in companies’ environment, health, and safety programs. Other companies probably offer similar software. A link to the ESP website is not provided to promote or recommend the company’s products. This link is provided because the company was quickly found by an Internet search, and the company seems to offer, at its website, good explanations of this type of software, and what the software is intended for. The output from environment, health, and safety software packages, such as offered by ESP, might be of potential use to accounting departments. This is not “accounting” software. No information was found that accounting software needs to be, or has been, developed or modified by accounting software vendors, in a way to specifically address environmentally-related accounting issues. http://www.aicpa.org/PUBS/JOFA/nov2000/rezaee.htm. This link takes you to a Journal of Accountancy article that describes the International Organization for Standardization’s ISO 14000 standard, a standard for company environmental decision-making and practices. ISO 14000 probably addresses company decision-making and practices much broader in scope then the decision-making and practices that an accounting department is directly concerned with. Because an important topic (and tool) with ISO 14000 is environmental management systems (EMSs), what ISO 14000 says about EMSs might be of interest and useful to financial accounting. b. Calculators. http://www.mde.state.md.us/BusinessInfoCenter/PollutionPrevention/P2/eca.asp. This link takes you to a Maryland state website, at which calculators are available that can compute such results as: emission reduction and cost savings by implementing certain energy efficiency measures; the impact that alternate waste management practices can have on emission and energy reductions; the impact of using “recyclable” materials on greenhouse gas reductions; and the impact of paper use alternatives on natural resource reductions. c. Insurance. http://www.wisbar.org/AM/Template.cfm?Section=Wisconsin_Lawyer&template=/CM/ContentDisplay.cfm&contentid=64873. This link takes you to an article, written by Arthur J. Harrington, that discusses if, how, and when insurance might be an option for a company hedging the risk associated with potential company environmental liabilities. http://www.irmi.com/Expert/Articles/2005/Hill08.aspx. This link is to an article, written by Michael O. Hill, on the use of “insured fixed-price cleanups” (IFCs). As I understand, and greatly simplified, IFCs represent a system where a “clean-up” contractor bids for a company’s future “clean-up” project at a fixed price. The bid has associated with it an insurance company 's guarantee related to covering costs greater than the agreed-upon fixed price. The bidder pays the insurance company fees for this guarantee, increasing the bid amount. But, the company and the contractor seem to have more protection against cost overruns. An effect of IFCs seems to be more accurate cost estimates of clean up costs, which accounting departments can use to better book liability entries, required by FIN 47. Section IV. Websites that present environmental management topics, broader than accounting standards, of possible interest to accounting departments. Topics include suggested accounting practices related to the company’s environmental management (but not accounting standards, which are presented in Section II, above). a. Suggested environmental-related accounting and management practices by environmental agencies and other environmental stakeholders. http://www.epa.gov/ebtpages/econenvironmentalaccounting.html. This link takes you to the US Environmental Protection Agency’s resource site for environmental accounting. Accounting at this site is more than just for company-paid costs and liabilities, but also relate to external costs, not accounted for by companies. http://www.epa.gov/fullcost/. This link takes you to a US Environmental Protection Agency resource site for full cost accounting. Full cost accounting seems to be most useful by government entities where full costs determination is more relevant than for a company. Full costs accounting considers not just monetary and other asset payments, but also opportunity costs. http://www.epa.gov/oppt/library/pubs/archive/acct-archive/pubs/greenac.pdf. This link takes you to a US Environmental Protection Agency report (PDF file) providing information on a 1995 American Telephone and Telegraph Company project to implement “green accounting”. http://www.environment.gov.au/settlements/industry/finance/publications/project.html. This link takes you to an Australian government site, at which you can gain access to five case studies conducted in Australia. The purpose of these case studies was to demonstrate how environmental accounting could be implemented and conducted in industry sectors and organizations. http://ecolu-info.unige.ch/recherche/supprem/content/unctad/reference_material/CAET-UNCTAD-MANUAL.pdf. This link takes you to a United Nations report, entitled “Accounting and Financial Reporting for Environmental Costs and Liabilities”. The report is a text book-like reference source on accounting and financial reporting for environmental costs and liabilities, providing, in general, acceptable accounting practices. http://www.unep.ch/etb/areas/VRC_index.php. This link takes you to a United Nations site, which is a resource center for green accounting. Manuals, case studies, and other types of documents can be linked to, which provide green accounting information. Accounting at this site is more focused on the accounting of environmental assets, external to company owned assets. http://unstats.un.org/unsd/envaccounting/default.asp. This link takes you to another Untied Nations site dealing with environmental accounting. This site seems more focused on the accounting of statistics and data related to natural resources and associated environmental impacts. b. Suggested auditing of company’s environmental performance. http://www.allbusiness.com/auditing/3337569-1.html. This link takes you to an AllBusiness site, at which are over 700 links to articles, many dealing with environmental audits (mostly non-financial). http://acct.tamu.edu/smith/env_acct/Envaud.htm. This link takes you to a Dr. L. M. Smith site that provides a general overview of the variables that can exist in the purposes of environmental audits. c. Environmental accounting definitions and explanations. http://en.wikipedia.org/wiki/Environmental_accounting. This link takes you to a Wikipedia page, which provides various definitions, with explanations, of environmental accounting. Environmental accounting has various meanings, depending on where and who uses the term. http://www.unctad.org/en/docs/c2isard2.en.pdf. This link takes you to a Untied Nations report that provides good definitions and explanations of many terms used in environmental accounting, both from the perspective of a company accounting (internal costs) and from the perspective of the environment (community costs). The report also discusses performance measures related to environmental management and the relationship of these measurements to company reporting. http://www.environment.gov.au/settlements/industry/corporate/accounting/index.html. This link takes you to an Australian government site, at which are explanations for environmental accounting from the perspective of company management (internal costs) and from the perspective of the environment (external, societal costs). Other topics explained include environmental management systems and corporate sustainability reports. d. Environmental legislation http://www.erraonline.org/regulations.htm. This link takes you to a site, maintained by the Environmental Risk Resource Association, which has links to many US environmental regulations and environmental management best practices. Section V. Websites that present information on company sustainability reports. Company sustainability reports are usually separate reports from company annual reports. Whereas annual reports usually conform to government regulatory information requirements, such regulations, do not seem to yet exist that govern sustainability reports (in most countries). http://www.globalreporting.org/Home. This link takes you to the Global Reporting Initiative website, at which you can gain access to many company sustainability reports (registration, which is free, is required). This site is an excellent resource for information on sustainability reporting. http://www.aicpa.org/innovation/baas/environ/faq.htm. This link takes you to an American Institute of Certified Public Accountants website that answers frequently asked questions about company sustainability reporting. Varieties of sustainability reporting (which are defined at the site) include: health, safety, and environmental reports; corporate social responsibility reports; and triple-bottom-line reports. http://www.aicpa.org/PUBS/jofa/dec2006/ballou.htm. This link takes you to a Journal of Accountancy article, written by Brian Ballou, Dan L. Heitger, and Charles E. Landes, which provides information on sustainability reporting. An article emphasis is assurance requirements and auditing related to sustainability reporting. http://www.nysscpa.org/cpajournal/2003/0603/dept/d066003a.htm. This link takes you to an article, written by Maef Woods, appearing in the CPA Journal, which provides information on the Global Reporting Initiative. The Global Reporting Initiative is one of the leading, if not leading, efforts to create acceptable and useful substantiality reporting. http://www.p2pays.org/ref/26/25623.pdf. This link takes you to a report, prepared by the European Federation of Accountants, which has the purpose of examining the current characteristics of sustainability reports, and then suggesting how these reports can be made more acceptable. Section VI. Websites that present information on the environmental accounting sections of Japanese company sustainability reports. Japanese companies have been including, in their sustainability reporting, quantitative data about environmental costs and management, which seems unlike what is included in the sustainability reports of companies in other countries. This section presents examples and explanations of the environmental accounting reports appearing in Japanese sustainability reports. http://www.toyota-industries.com/csr/library/pdf2006/63-64.pdf. This link takes you to the environmental accounting section of Toyota’s 2006 sustainability report (PDF file). The section includes tables that provide data on: performance of environmental investment and expenses; the quantitative efforts of Toyota’s environmental conservation program in terms of reduced emissions and other environmental impact reductions; and the economic benefit, in Yen, that Toyota believes it has received from its environmental management program. The section also shows a quantitative analysis of what is called “environmental efficiency”. A formula is given for computing environmental efficiency. http://www.env.go.jp/policy/kaikei/report00e.pdf. This link takes you to a 2000 report (PDF file) from Japan’s Ministry of the Environment, which seems to provide a good, in depth, overview of Japanese ideas about their evolving environmental accounting. Some explanation related to what are now being presented in Japanese company reports, related to environmental accounting, can be found in the report. http://www.env.go.jp/policy/kaikei/guide02/accounting_all.pdf. This link takes you to a 2001 report (PDF file) from Japan’s Ministry of the Environment, which examines Japan’s evolving environmental accounting system in three industry sectors: electronics; distribution; and food. The report goes into some detail on the application of Japan’s evolving environmental accounting system in each sector. http://www.oki.com/en/otr/downloads/otr-188-04.pdf. This link takes you to an article (PDF file), written by personnel at the Japanese company Oki Group, which provides an analysis of environmental accounting at Oki Group. Oki Group’s environmental accounting, like Toyota and many Japanese companies, is the basis of an environmental accounting section in their sustainability reporting. VII. Conclusions. a. This article identifies 36 websites that hopefully will provide, efficiently and effectively, environmental accounting and management information needed by accounting departments; b. Although only 36 links to websites are provided, information at these websites is large, and probably addresses many questions, at least initially, that most accounting departments, especially smaller departments, might have about environmental accounting; and c. Because of the increasing public concerns about the environment, more, quantitative company reporting, that can be audited, should be expected in the future. 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