New Delhi, Dec. 1
Soon, Indian companies will have to compulsorily follow a cost-accounting standard on climate change.
The Corporate Affairs Ministry has asked the Institute of Cost and Works Accountants of India (ICWAI) to prepare such a Standard — the first of its kind even globally. This means companies will have to work out costs involved in adopting environment-friendly measures and disclose them.
The Government can use this data while taking policy decisions and for climate change talks.
The Ministries of Corporate Affairs and Environment will shortly hold discussions on this. The new cost-accounting Standard on environment-friendly measures will be high, but achievable by Indian companies. The Standard will be on costs incurred for reducing pollution, re-planting forests or restoring mined areas.
The ICWAI would seek International Federation of Accountants' inputs. The Standard on climate change could be stand-alone or part of other new cost accounting Standards.
ICWAI member Mr A. N. Raman said the Institute has released management guidelines on environment-related corporate strategies. The Government may link these guidelines to the Standard on climate change to make it mandatory and ask the Board of Directors to disclose if companies are complying.
“Climate change is the buzz word in management and cost accounting globally and India will take the lead. Environment-friendly companies will get good grades,” said the ICWAI President, Mr G. N. Venkataraman.