Corporate characteristics and environmental management accounting (EMA) implementation: evidence from Malaysian public listed companies (PLCs)

Abstract

Adopting the contingency theory framework, this study investigated the extent to which Malaysian public listed companies (PLCs) implement environmental management accounting (EMA) and whether the implementation varies across corporate characteristics. Five corporate characteristics, namely, environmental sensitivity of industry, company size, ownership status, Environmental Management System (EMS) adoption and the proportion of non-executive directors (NEDs), were examined. The results, derived from postal questionnaires, indicate that the extent of EMA implementation was moderate and that more emphasis was placed on environmental cost effectiveness activities. The results also imply that complying with environmental regulations is more important than incorporating EMA information into performance measurement, control and reporting. Except for ownership status, the extent of EMA implementation, however, did not vary among corporate characteristics, and thus, provides limited support to contingency theory in explaining the extent of EMA implementation among Malaysian PLCs.

Environmental Management Accounting in the Malaysian Manufacturing Sector

“…Jalaludin et al (2010) provided that EMA implementation is moderate, but their results produce positive correlations between EMA (monetary and physical) and environmental performance. A more recent study by Mokhtar, Jusoh, and Zulkifli (2016) found that EMA implementation is moderate, but which has shown an increase from previous studies. This could be an indicator that EMA is slowly but surely gaining more interest.…”

“…According to Schaltegger, Hahn, and Burritt (2000), physical EMA is used primarily for the setting of goals and targets in order to monitor and control the environment. Thus, EMA can be used to determine day to day operations and strategies providing for better environmental information as the absence of proper measurement of environmental information hinders companies from generating relevant information for decision-making (Schaltegger et al, 2000;Burritt et al, 2003;Mokhtar et al, 2016).…”

“…Despite the importance and benefits of EMA, the adoption and implementation of EMA in many developing countries such as Malaysia is still weak (Jamil, Mohamed, Muhammad and Ali, 2015). Although EMA is important to improve a company's environmental performance, research of EMA in Malaysia is still relatively new and scant (Mokhtar, Jusoh, & Zulkifli, 2016). In order to add to the scant literature and in view of the importance of the Malaysian manufacturing sector as previously mentioned, this paper assesses EMA in the Malaysian manufacturing sector.…”

Corporate social responsibility and financial performance relationship: a review of measurement approaches

“…Examples of environmental activities include pollution control investment data (Peng & Yang, 2014), deployment of a carbon-reduction strategy (Cadez & Czerny, 2016;Lee, 2012;Liu, 2012;Liu & Liu, 2016), eco-control usage (Henri & Journeault, 2010), the ratio of toxic waste recycled to total toxic waste generated (Al-Tuwaijri, Christensen, & Hughes, 2004), adoption of global environmental standard (Dowell, Hart, & Yeung, 2000), environmental proactivity (Primc & Čater, 2015), environmental management accounting implementation (Mokhtar, Jusoh, & Zulkifli, 2016), environmental sustainability policies (Naranjo-Gil, 2016), etc. Examples of philanthropic activities include donations (Lin, Yang, & Liou, 2009), growth in charitable contributions (Lev, Petrovits, & Radhakrishnan, 2010) and public health policies (Naranjo-Gil, Sánchez-Expósito, & Gómez-Ruiz, 2016).…”

Green controlling – concept and practice

“…In other words, EMA incorporates two types of environmental information, namely, physical and monetary (Mokhtar et al, 2016). Physical environmental information refers to the flow of energy, water, materials and wastes, for instance the total volume of wastes and energy consumed and the total amount of fresh water consumed.…”