FACTORS AFFECTING ENVIRONMENTAL MANAGEMENT ACCOUNTING AND ENVIRONMENTAL PERFORMANCE: AN EMPIRICAL ASSESSMENT

Gholamreza Zandi,Hoyoung Lee

doi:10.32479/ijeep.8369

Abstract

In today's world, businesses have no apparent geographical boundaries for functioning, trading and delivering products and services. However, given the threats to environmental sustainability, modern businesses are restricted to adopt several environmental policies to operate in existing the present globalized ecosphere. Thus, the present study aims to examine the relationship between internal and external drivers of environmental management accounting. In doing so, the study seeks out the association of customer influence, regulatory pressure and firm's moral and social responsibility on environmental management systems in the Indonesian manufacturing industry. Moreover, the current study is also motivated to investigate the impact of EMA on a firm's environmental performance. The current study applied a partial least square structural equation modelling. The results of PLS-SEM confirm that all variables have a positive and significant impact on environmental performance. The results conclude that customer influence, regulatory pressure, and moral & social responsibility have a positive and significant contributor in enhancing environmental management accounting system. Moreover, the results further confirm that environmental management accounting system also plays a significant role in boosting the environmental performance in Indonesia. Therefore, the current study recommends SMEs to give more focus on enhancing the moral and social responsibility among its employees and also make a good control over the regulation and customer influence.Keywords: Customer influence, Moral & Social Responsibility, Environmental Performance, Indonesia.JEL Classifications: Q55, Q50DOI: https://doi.org/10.32479/ijeep.8369

Highlights

In the present time, businesses from all around the world, are facing severe environmental challenges (Perring et al, 2015)
Knowing the continuous decline in the ecological conditions, the corporate world is confined with several limitations and regulations that caused the organizations to implement ecologically driven strategies that ensure environmental performance (ENP) (Le Gouill et al, 2019; Bromley, 2007)
environmental management accounting (EMA) is comprehended as the administration of financial, quantitative and qualitative evidence regarding firm’s ecological effects and the economic significance of ecologically driven organizational practices and their information which aids managerial decision making and firm’s environmental responsibility (Schaltegger et al, 2003)

Summary

INTRODUCTION

Businesses from all around the world, are facing severe environmental challenges (Perring et al, 2015). Organizations are pursuing environmental accounting to recognize their impact on the environment and augment their ENP (Latan et al, 2018) In this regard, the contribution of Environmental management accounting (EMA) is significant in identifying the firm’s environmental cost and influence on the natural environment and lending support to the organizational motive of higher sustainability. Consumers in modern times are more ecologically aware and possess a greater demand for green products and services This involves the consumption trend that motivates the utilization of goods and services that are processed through eco-friendly methods and delivered minimal damage to the environment. The understanding emerged from the current investigation would assist in recognizing crucial internal and external drivers of EMA and assist organizations in evaluating their environmental influence and performance measures. Chapter five presents a study conclusion and important implications of the findings

LITERATURE REVIEW AND HYPOTHESES

METHODOLOGY

DATA ANALYSIS AND INTERPRETATION

Findings

CONCLUSION AND DISCUSSION