Issues in Accounting - Natural Resources
- Posted by admin
- 27 February 2014
The accounting industry is facing a new and unprecedented potential crisis these days, which is one that involves maintaining access to natural resources after company registration.
Why the Crisis?
For years now, advocates have been telling the world that our available natural resources are dwindling. Things like coal, petroleum, natural gas and even certain ores are drying up and becoming more difficult to locate and process. Because of the inevitable competition for these resources, it is likely that prices will continue to skyrocket over the next decade. For some, this means that maintaining a current way of business after company registration is going to become more challenging, particularly since small businesses will be competing with those who are already well-established.
How Nature Affects Business
During company formation, few people take the time to consider non-financial aspects. This can be detrimental, especially since even things like fresh water and clean air supplies are in jeopardy today. Thus, there are some groups out there who have proposed that companies that take a firm stance on protecting these resources and finding alternatives should be rewarded, while those who continue to consume them with no regard for others should be punished financially. If something like this should occur, it would mean that as soon as company registration completes, those that fail to hold to the high standards may find that their credit ratings are becoming affected.
What This Means
In a nutshell, all of this means that information pertaining to finances as well as the intended use of natural resources will need to be disclosed to shareholders and the public directly after company formation. An assessment of the use of these resources can be used to determine which companies will need to make significant changes and which ones are already on the right path. Though the reward and punishment system is still a theory and may be a long way from becoming law, it is thought that such a system will be necessary in the long run in order for all industries to have an equal opportunity.
Sustainability and Success
Even prior to company registration, it is important to consider the financial impact that natural resources will have based upon the industry, the scope of the company’s reach, and other factors. Only then will these company leaders be able to work with various environmental groups to find ways to reduce their usage of such resources and preserve them for the future. In fact, a lot of emphasis is being placed on alternatives to these resources; sustainable sources of energy from the sun, wind and even water are areas of focus. There may come a time when business owners are rewarded for investing in other businesses that make such technologies available, as well.
Overall, company registration in the future is expected to change drastically - based solely on the number of natural resources available to support it. Business owners and shareholders who are willing to recognize and address these issues will stand the best chances of enjoying success.