25 Sep 2022


Managerial Accounting: What It Is and Why It Matters

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The earth has always had a value that it adds to the human population despite the lack of recognition. In most cases, human beings never recognize the impact of the natural environment. People always think of it from a selfish point of view where they give less attention to the public benefit but focus on private profits. The world has become materialistic and money oriented that they have forgotten the value of protecting the environment. Industries always think about manufacturing and increasing their profits at the expense of using the natural products provided by the environment. It is seen that the right profit owners are never the human population and their activities, but it is nature that surrounds the community providing the raw materials used in eventually manufacturing products (Sukhdev, 2011). 

According to Sukhdev (2011), an environmental economist, he gives an example of the Amazon forest where it emits a lot of vapour from the trees. The wind then blows the vapour to the La Plata basin areas causing massive rainfalls. Rainfall in this area has helped in the improving of the environment agricultural production making it a source of income for many in the area. Due to such conditions, the people in the areas tend to enjoy the profits of the natural environment and yet do not recognize. Sukhdev (2011) gives another example of the insects that pollinate flowers that end up in reproducing fruits essential to the human population. In such a case the human population enjoys the fruits with no consideration of how nature has impacted the results. Nature is never counted in the calculation of the economy of a place. It is mainly the economic invisibility of nature that causes the human population to neglect its existence and maintenance (Sukhdev, 2011). 

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Sukhdev’s approach of accounting is necessary to implement for it will help the community to ensure that they take care of their natural capital. As discussed earlier, people tend not to take heed on the way nature assists in creating a conducive economic status. It is through such an accounting method that people will recognize its importance and begin to maintain it to continue enjoying its benefits. Currently, there has started a sensitization where people have become more active in the maintenance of the natural environment. Trees are being planted to replace those that are cut down, and factories are using the ‘going green’ slogan to avoid the emission of toxic waste materials that harm the environment. Such cautious takes are maintained to help with the accounting of what happens in the environment (Sukhdev, 2011). 

Innovations are needed in the way measuring is done. According to Sukhdev, one cannot value what they cannot measure. It is the responsibility of human beings to recognize the existence and importance of natural features to the economy. It is high time that we measure and recognize the natural capital in our economy. The environment needs to benefit from the profits generated by the economy. It can help through programs and projects that are sponsored by human beings to maintain the environment. Maintenance is done on natural vegetation, air, water bodies and soil where pollution is minimized. The economy requires making room for natural capital where it is used to calculate GDPs (Sukhdev, 2011). 

The ideas presented by Sukhdev are practical but had to implement. Some governments may embrace the method quite quickly where as there are those that may take the time to embrace. The environment is an asset to the human population, and it is paramount that people recognize it and take the necessary accounting measures as suggested (Sukhdev, 2011). 


Sukhdev, P. (2011). Put a Value on Nature! | TED Talk |TED.com . Retrieved August 2, 2017, from, https://www.ted.com/talks/pavan_sukhdev_what_s_the_price_of_nature?language=en 

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