An exploration of the implementation and usefulness of environmental management accounting (original) (raw)
Related papers
Environmental Management Accounting (EMA) Guidelines for Sri Lankan Enterprises
Guidelines on EMA for organizations have been published by various national and international institutes around the world. Yet, in Sri Lanka, there has been little attempt at the national level to guide industries on adopting and sustaining environmental strategies and its supporting accounting tool, EMA. “Environmental Management Accounting (EMA) - Guidelines for Sri Lankan Enterprises” is a publication that aims at filling this long felt need for industries. It is apparent that management accounting can play a crucial role in driving organizations for better environmental performance, irrespective of the organizational function that utilizes it. The growing body of EMA practices which can support this is presented here with the primary aim of improving the level of awareness of Sri Lankan managers on how EMA could be adopted and made use of. It is expected that the improved understanding will be a catalyst in leading industries across diverse sectors for better adoption of EMA in Sri Lanka.
Environmental Management Accounting Practices and their Diffusion: The Sri Lankan Experience
NSBM Journal of Management, 2016
When implementing environmental management strategies it is important to use effective accounting tools to facilitate corporate decision making. In this context, a body of accounting practices, known as Environmental Management Accounting (EMA), has emerged as an interface between management accounting and environmental management. This paper attempts to provide a snapshot of EMA practices in Sri Lanka using the authors' experience in dealing with several industries. It presents the commonly observed EMA tools and techniques used in Sri Lankan organizations while discussing how they have been diffused through adopters and propagators. Despite the rapid diffusion, the authors do not find a comprehensive and systematic adoption of EMA in Sri Lanka. This situation offers opportunities for Sri Lankan organizations to benefit from the proper adoption of EMA in the future.
The Effect of Environmental Management Accounting on Corporate Sustainability
Binus Business Review, 2020
This research aimed to examine the effect of Environmental Management Accounting (EMA) on corporate sustainability in mining, agriculture, construction and construction materials, energy, textile and apparel companies in Indonesia from 2014-2018. This research had 87 observations from 20 in Indonesia from 2014-2018. EMA was measured by eco-efficiency energy. Meanwhile, corporate sustainability was measured by environmental and social factors. The researchers used content analysis to measure entity sustainability. The data were qualitative and quantitative in the form of annual reports and company sustainability reports based on the G4 of Global Reporting Initiative (GRI). The results show that there is a positive influence between EMA on corporate sustainability. The high value of the eco-efficiency of the companies indicates the low usage of energy. The low use of energy certainly has a positive impact on environmental and social aspects as well as being a determining factor for co...
Environmental Management Accounting in Sri Lankan Enterprises
The idea of writing this book occurred to us a long time back but not in a planned way. Having understood the importance of sustainability accounting education, in 2012, at the Department of Accounting, University of Sri Jayewardenepura, Sri Lanka, we introduced an elective course unit on Sustainability Management Accounting (SMA), perhaps for the first time in an undergraduate course in the country. As a part of this course unit, the students had to develop a case study on SMA aspects of a selected organization. When visiting various organizations for data collection purposes with students, I witnessed how Sri Lankan companies implemented various environmental management strategies with the help of accounting/numbers. Though very little is written about them, these organizations were doing remarkably well in many respects. When the Department of Accounting held a Forum on Sustainability Management Accounting in 2014 with the primary purpose of educating the business professionals on this emerging field of accounting, we published these case studies in a Special Issue of the Journal of Accounting Panorama on the theme of Sustainability Management Accounting in Sri Lanka. At the Institute of Certified Management Accountants (CMA) National Management Accounting Conference, in June 2014, we pioneered another project to publish Environmental Management Accounting (EMA) Guidelines for Sri Lankan Enterprises. These guidelines were well received by the Sri Lankan business professionals and, in August 2014, I conducted a workshop on Adopting Environmental Management Accounting based on these guidelines. Through these guidelines and the workshop we attempted to address the “What” question with Sri Lankan business professionals in mind. While disseminating knowledge of this discipline through these various means, we felt it was important to address the “How” question also keeping Sri Lankan and international readers in mind. Over the years of our experience with industry engagement, we observed how EMA was applied by Sri Lankan enterprises in different ways. However, little was recorded on how and to what extent EMA was being applied in Sri Lanka or in emerging economies. Therefore we thought it was timely to showcase Sri Lankan examples of EMA applications. This was even highlighted when the Department of Accounting, University of Sri Jayewardenepura, was hosting the Global Conference of Environmental and Sustainability Management Accounting Network (EMAN) in January 2015 in Colombo for the first time in the South Asian Region . I was fortunate to have a set of students (they are now graduates working in different organizations) from the first batch of the Sustainability Management Accounting course unit, who were inspired to engage in an arduous project of this nature. After perusing the literature, we first decided on the chapter plan of this book. The chapters were arranged to showcase EMA practices in different environmental domains such as energy, water, waste and carbon footprint. We originally desired to include a chapter on bio-diversity management and EMA, but due to various practical limitations we had to abandon the topic. The next challenge came when we decided on the industry sectors to be covered under these environmental domains. Though the industries were mainly selected on accessibility criteria we attempted to maintain a mix of industries in each chapter. Ultimately we realized that we had been a little biased towards the apparel industry, but due to its importance in Sri Lanka we thought it was alright to leave it that way. The next biggest challenge was when collecting data for the study. In addition to time constraints we had several other obstacles to overcome. Though we wanted to explore the Sri Lankan enterprises, when collecting data we came across a challenge over the generic definition of “Sri Lankan enterprises”. Some companies who follow noteworthy EMA practices have been largely influenced by the guidelines of their foreign parent companies. Since we wanted to showcase Sri Lankan practices, we decided to select only companies with a Sri Lankan ownership and control (I doubt whether the term “indigenous Sri Lankan enterprises” is the correct word here). Due to this delineation we had to exclude many companies that were pioneers in environmental management in the country. We also encountered another problem with regard to EMA practices. Some companies follow initiatives that are of a pure CSR nature and those projects do not have any relationship with the core businesses. Therefore we had to ignore these EMA practices for which there is no business case. Except for a few exceptions, we visited all the companies described in the book to witness these practices at first hand. We interviewed several managers of each company in charge of these practices. We used an interview guide to better structure our interviews. Moreover, we always referred to various other documents as a means of triangulation. We were surprised when some companies were not at all hesitant to share their very confidential information with us to build our cases. Now, in retrospect, we realized that we had been collecting data for this study over a period of minimum two years, albeit not at the same level of intensity. When collecting data we found that these companies were at different levels of the development stages of EMA. This phenomenon revealed that in some companies there were sophisticated EMA systems in certain environmental domains, while in other domains EMA was e at primitive levels. However, since our focus was on environmental domains we did not have much of a problem here. As I mentioned in the second paragraph the objective of this book is to showcase Sri Lankan EMA practices. An international reader might question why Sri Lanka is important for him/her. Though we have internal validation, we thought it necessary to have some ground for justifying the selection of Sri Lanka. Although the following list is not exhaustive, it provides some justifications for our selection. The list below highlights the natural endowments of Sri Lanka and the challenges to preserve the natural environment while pursuing economic development:
Environmental Management Accounting (EMA) is concerned with physical and monetary information, therefore enabling a new type of analysis that supports decision making while considering the environmental dimension. However, for an organization to apply EMA is necessary to meet business requirements and therefore the potential benefits and likely costs of the implementation should be assessed in the first place. The first objective of this paper is to highlight the reasons for implementation of EMA referring to eco-efficiency, cost-effectiveness, investment appraisal, strategic positioning and compliance. The second is to presents a high-level blueprint for EMA implementation for a theoretical company and highlight the factors that influence the success of the implementation. The conclusions suggest that given the multitude of EMA methodologies, comparative studies might shed more light for practitioners.
The purpose of this research is to identify the determinants of Environmental Management Accounting (EMA) practices of the Public Listed Companies (PLCs) and Small and Medium Enterprises (SMEs) in Sri Lanka. Using a selfadministered questionnaire survey, primary data were collected from 33 PLCs and 40 SMEs in Sri Lanka. Findings imply that environmental laws, shareholder perception, consumer perception, competitor perception, staff motivation, and pressure from environmental groups are the significant determinants of EMA adoption in PLCs and SMEs. However, EMA implementation by PLCs and SMEs is hindered by unions and financial institutions. In SMEs, resource constraints and resistance to change are the main impediments, whereas financial and resource constraints are the main obstacles to adopting EMA practices in PLCs. SMEs believe that EMA practices reduce environmental damage, increase ecological sustainability, and improve the firm's reputation. Moreover, most PLCs believe that implementing EMA practices reduces pollution, lowers costs, improves environmental stewardship, and improves the firm's reputation. This study updates and extends on prior survey-based research on EMA comparing PLCs and SMEs. The study can help SME owners and PLC management comprehend the benefits of EMA while green-friendly stock investments will be encouraged.
Consequences of Environmental Management Accounting (Ema): The Theory Behind
International Journal of Business and Applied Social Science, 2020
The need for Environmental Management Accounting (EMA) can be associated with the major problems of environmental degradation that lead to other concerns, such as legitimacy and competitive issues. EMA is seen as a management accounting innovation whose consequence is a boost to corporate performance. EMA can benefit the competitive position of a firm by directing the attention of its managers towards potential cost reduction or potential areas for differentiation. EMA can also help firms gain resource productivity and process efficiency, which will result in the reduction of waste and improved the financial profitability of the firm. In other words, EMA practically improves both the environmental and economic performance of a firm. However, despite all these success stories, many firms are still reluctant to take a more proactive approach to EMA, perhaps due to a perceived lack of evidence that the benefits exceed the costs of pursuing these initiatives. The findings so far may als...
Sustainability Accounting and Reporting
Sustainable Value Creation
This book provides an up-to-date overview of the most current developments in environmental and sustainability accounting and its links to reporting. This fourth volume in the Environmental Management Accounting Network (EMAN) series is characterized by a broad geographical and a contextual range of topics. Contributions from nearly all continents discuss new developments in environmental accounting and investigate topics and links between corporate environmental and sustainability issues as well as between strategy, measurement and information management or between accounting and reporting. For the last five years EMAN, the environmental and sustainability accounting network, has developed from a small, dedicated group of European academics to a full-fledged international network with strong links to corporate accounting and reporting practitioners, international organizations and regulators. The network provides a platform for the exchange of ideas and the sharing of experiences with environmental and sustainability accounting and reporting. "EMAN Global" (www.eman-global.net) serves as an umbrella organisation of the regional sections in the Asia Pacific (EMAN-AP), Europe (EMAN-EU), Americas (EMAN-AM) and Africa (EMAN-AF). Based on the success of the annual conferences of the European and Asia Pacific sections the American and African groups are planning their first workshops. The regional sections of EMAN have their own independent work agendas but are linked with each other through the steering committee of EMAN GLOBAL and by participating in other regional conferences, fora and workshops. Dealing with sustainability accounting and reporting EMAN has concluded that environmental management accounting (EMA) constitutes an indispensable cornerstone and can be defined as a subset of sustainability accounting and reporting. Currently EMA is the most developed subset of sustainability accounting. This is why the steering committee of EMAN decided to keep its well-known acronym EMAN but to rename the network into Environmental and Sustainability Accounting Network. With the extending global EMAN network the fourth EMAN book draws its selection of best papers from the EMAN-EU conference on sustainability accounting and reporting held in Lüneburg in 2004, with more than 200 participants, and the 2005 EMAN-AP conference in Bangkok with more than 100 participants. The papers presented in this book have gone through an independent peer review and thorough editing process to ensure the highest possible research quality for academic submissions, or, for more practically orientated ix x Preface contributions, the greatest usefulness for potential corporate and political practitioners. The publications presented in this book have been selected following an intense blind review and editorial process drawing from over eightly initial abstracts and papers submitted. Most papers had to be revised on the basis of two to four reviewer reports linked with two to three revision cycles. Such activity does not just involve a substantial workload for the authors it also depends on the goodwill of and commitment of time from the reviewers and editors. For their valuable comments we would like to thank all reviewers for their diligent and important work:
Exploring Corporate Practices in Management Accounting for Sustainability
2013
business with COnFiDenCe icaew.com/academic iCAew promotes and funds, through its charitable trusts, high-quality independent academic research of interest to the accountancy profession and the wider business community. this publication was produced with the help of a grant from iCAew's charitable trusts. these trusts support educational projects in accountancy and related subjects. All research reports and briefings published under the iCAew's charitable trusts imprint are independently refereed before publication. the kind permission of edward elgar Publishing. table 1 is reproduced from burritt, R.L., hahn, t. and schaltegger, s. (2002), 'towards a comprehensive framework for environmental management accounting. Links between business actors and environmental management accounting tools', Australian Accounting Review, 12(2), 39–50, with the kind permission of AAR and wiley-blackwell. All rights reserved. if you want to reproduce or redistribute any of the material...
In the Pursuit of Environmental Sustainability: The Role of Environmental Accounting
Sustainability
This study aims to evaluate the mediating role of sustainability in the relationship between environmental-accounting (EA) disclosures and audit quality (AQ) and firm performance (FP) by using GDP and firm size as the controlled variables. Data were collected from the annual and sustainability reports of 80 manufacturing firms that were listed on the PSX during the last 10 years (2011–2020). STATA 13 software and a multiple-regression model were used. The findings that were deduced from the empirical results indicate that EA with sustainability has a significant negative effect on both proxies of the FP (ROA and ROE). By contrast, AQ with sustainability has an insignificant negative impact on firm performance. This research contributes to the scarce literature and compares the level of EA with sustainability reporting and its impact on the FP with the controlled variables GDP and firm size. This study also contributes to the execution of the reporting and the assurance of sustainabi...