Abstract
Environmental degradation is a serious global issue that has received increasing attention from scholars, policymakers, regulators, environmental activists, and the public as a whole. In the meantime, corporations have been criticized as major contributors to environmental pollution. Environmental accounting (EA) is a corporate practice that seeks to account for the cost of environmental impacts of business operations. However, it is questionable whether the true cost of environmental impacts of business operations is accounted for in the conventional accounting systems. In order to shed more light on this issue, this study examines key drivers of managerial intention to engage in EA practices in Sri Lanka. We employ the theory of planned behavior to conceptualize the antecedents of managers’ intention to engage in EA practices. The results of the partial least square structural equation model (PLS-SEM) evaluation revealed that managers’ intention is significantly influenced by the attitudes towards EA practices, subjective norms, and perceived behavioral control. Our results also indicate that a larger proportion of the variance of perceived behavioral control is explained by the perceived cost and complexity, perceived regulatory pressure, and organizational environmental orientation. The findings of this study provide important theoretical and practical implications for scholars, managers, and policymakers.
Highlights
Rapid industrialization, along with the increased globalization, has led to far-reaching, detrimental effects on the natural environment, such as environmental pollution and contamination, and sharp depletion of natural resources
Linking the dimensions of theory of planned behavior (TPB) with other theories pertaining to Environmental accounting (EA) practices, such as neo-institutional theory, stakeholder theory, and legitimacy theory, this study shows that managerial attitudes, subjective norms, and perceived behavioral control are significant predecessors to managerial intention to engage in EA practices
These results suggest that listed companies’ managers’ attitudes towards EA do not have a substantial effect on their intention to engage in EA practices; in addition, their perceived cost and complexity associated with EA have no impact on perceived behavioral controls
Summary
Along with the increased globalization, has led to far-reaching, detrimental effects on the natural environment, such as environmental pollution and contamination, and sharp depletion of natural resources. Environmental accounting (EA), in this way, incorporates environmental costs into the financial results of a company’s operations This would help the companies to understand the magnitude of the impact of companies’ operations on the natural environment. With the EA reports, business owners and managers will develop a better sense of their environmental expenditures, which is the first step towards strategic management and innovative planning for controlling these expenditures. It provides a holistic picture of the overall financial position and increases the awareness of management and other shareholders about the true cost of natural resources consumed in making revenues [5]. The present study examines how well corporate managers in the developing world have perceived these benefits and how such perceptions shape their behavioral intentions towards EA practices
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