Environmental Management Accounting Adoption Barriers Among Malaysian Hotel Companies

Abstract

Environmental management has become a main concern to the hotel industry with regards to waste reduction, energy savings and water conservation. The hotel industry is frequently accompanied by many adverse environmental impacts as hotel companies extensively consume large amounts of energy, water and non-durable products. Environmental Management Accounting (EMA) is tools that can be used to assist these companies to trace, collect, and analyse physical and monetary environmental information for decision-making purpose and consequently, improves financial and environmental performances. However, there are barriers to EMA adoption. This study aims to examine level of EMA adoption among the hotel companies and the barriers influencing EMA adoption. This study utilises the quantitative research design; using questionnaire survey. A total of 212 usable questionnaires were collected from the hotel companies in Selangor and Kuala Lumpur. Multiple regression analysis was conducted for hypotheses testing. The results of this study show that EMA has yet to be extensively adopted among the hotel companies in Malaysia. The result also shows that the adoption level of both Physical EMA (PEMA) and Monetary EMA (MEMA) are still low. The result further indicates that the low adoption of EMA is caused by the lack of institutional pressures. Specifically, this study shows that financial barrier, informational barrier and institutional barrier significantly influence EMA adoption among the hotel companies in Malaysia. This study is significant to the hotel managers, government authorities and environmental regulatory agencies in understanding the level of EMA adoption in the Malaysian hotel industry. In addition, this study provides valuable contributions to the existing literature by providing useful insights on the barriers influencing EMA adoption in the hotel industry in developing countries.

Environmental Management Accounting System and Value Creation: An institutional perspective

“…Through EMAS adoption, both financial and non-financial environmental-related information are identified, collected, and used for the strategic business plan within the organization. However, prior research also found that the adoption of both Physical Environmental Management Accounting (PEMA) and Monetary Environmental Management Accounting (MEMA) was below the midpoint level (Ahmad et al, 2020;Mat Yusoh & Tuan Mat, 2020;Phan et al, 2017). Furthermore, environmental accounting practice in the service industry is weaker when compared to other sectors, and that most companies still insufficiently use environmental management to reduce their environmental footprint (Jankovic & Krivacic, 2014).…”

“…Prior research found that the adoption level of EMAS in Malaysia is still at the infancy stage (Ahmad et al, 2020;Mat Yusoh & Tuan Mat, 2020). Research by Jamil et al (2015) that focuses on small-medium manufacturing companies shows that EMAS adoption in Malaysia is still low due to a lack of institutional pressures.…”

“…The adoption level of EMAS is still at the infancy stage, especially in developing nations such as Malaysia (Mat Yusoh & Tuan Mat, 2020). Institutional pressure is the main factor that motivates companies toward more advanced environmental management (Chathurangani & Madhusanka, 2019).…”

Green Environmental Management System to Support Environmental Performance: What Factors Influence SMEs to Adopt Green Innovations?

“…Therefore, enhancing global sustainability among SMEs and communities calls for the introduction of policies and the development of methodologies [18], among which is the adoption of green environmental management accounting system (EMAS) [19]. EMAS is essentially an instrument that facilitates environmental performance management in firms and environmental information reporting to all stakeholders (internal and external) [7].…”

“…According to Asiaei et al [1], the decision of a firm to manage its environmental impact would involve the integration of accounting data and environmental data and strategies, and, to this end, EMAS has been known to achieve high corporate environmental performance. The objective of these firms is competitive advantage sustainability through the adoption of an environmental approach; for instance, the efficiency of firms can be enhanced through the elimination of contamination from manufacturing processes (via minimal required input, short processes, and control of compliance-related expenses and accountabilities) [18]. To this end, literature has documented the increasing momentum of environmental accounting among firms in search of sustainability [21][22][23].…”