Environmental Management Accounting Practices and their Diffusion: The Sri Lankan Experience

Gunarathne, Nuwan; Alahakoon, Yasanthi

doi:10.4038/nsbmjm.v2i1.18

Cited by 20 publications

(26 citation statements)

References 27 publications

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“…However, this study shows that even in developing countries, firms can still benefit by following an EMS. This fact is important, as studies indicate that some business organizations in Sri Lanka still consider environmental management activities as an additional cost or an act of corporate philanthropy, without integrating them into business operations and policies (Gunarathne, Peiris, Edirisooriya, & Jayasinghe, 2015). By pursuing environmental management practices, organizations can realize the benefits in the areas of increased cost savings through efficient resource management and productivity improvements, enhanced stakeholder relationships, improvements in eco‐innovation performance, better regulatory compliance, and pollution prevention (Christmann, 2000; Daddi et al, 2016; Delmas & Toffel, 2004; Hart & Ahuja, 1996; Phan & Baird, 2015; Simpson & Samson, 2010).…”

Section: Discussionmentioning

confidence: 99%

Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting

2020

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This study investigates the implementation of environmental management accounting in translating environmental management strategy into organizational performance. Further, the study identifies the influence of institutional pressures on environmental management strategy and environmental management accounting to provide a better description of the impact of the institutional environment on corporate environmental practices. The data were collected from 144 business entities in Sri Lanka using a web‐based survey and analyzed using partial least squares structural equation modeling. We found statistically significant evidence to state that the environmental management strategy is positively associated with the environmental and economic performance of organizations, whereas environmental management accounting mediates this relationship. Further, a firm's institutional environment positively affects both environmental management strategies and environmental management accounting. This study emphasizes that the organizational information systems such as environmental management accounting are useful in providing information on environmental costs and monitoring environmental and financial performance when implementing environmental management strategies in the pursuit of corporate sustainable development.

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Section: Discussionmentioning

confidence: 99%

Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting

2020

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“…This pilot program was conducted in 2011, and one of the Sri Lankan companies assessed in this study participated [6]. Although there has been considerable interest in following new developments in accounting, such as IR, within the corporate sector in Sri Lanka, particularly due to the active propagation of supply-side actors such as professional accounting bodies and business schools [6,33,123], the resulting level of IR disclosure indicated that IRQ has been improved only incrementally over time. Hence, this supports the opinion that many late adopters of IR in Sri Lanka have joined the bandwagon without internalizing the principles of IR to produce better quality reports [6].…”

Section: Discussionmentioning

confidence: 99%

Does Corporate Governance Affect the Quality of Integrated Reporting?

2020

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This study examines how governance mechanisms affect the quality of integrated reporting (IR), which is fast emerging both as a tool to help firms understand their value creation process and to communicate effectively with external stakeholders. This study first developed an index to assess the quality of integrated reports. Subsequently, 132 integrated reports of Sri Lankan public listed companies selected over a three-year period were content analysed. The hypotheses formulated on the relationship between corporate governance and the quality of IR based on the agency theory were analysed using multivariate linear regression and panel regression. The results show that there is limited support from the corporate governance system for providing quality information to stakeholders on the value creation process through IR, except for board size and the availability of a separate risk management committee. This is the result of the heavy emphasis of corporate governance requirements and the resulting mechanisms of Sri Lankan companies on mandatory corporate reporting requirements compared to a voluntary reporting model such as IR. Since many corporate governance aspects are meant to fulfill mandatory reporting requirements, the results imply that the directors have given limited attention to providing quality information through voluntary disclosure practices such as IR, although they use resources to prepare integrated reports.

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“…Second, the study is limited to a single country and a specific period during which the Sri-Lankan economy and stock market operations were at a declining stage. Further, Sri Lanka has a progressive accounting profession that has been keen to adopt new developments in accounting such as sustainability reporting and IR [16,73,74]. These factors could have an impact on the outcome of the study.…”

Section: Discussionmentioning

confidence: 99%

Does Integrated Reporting Enhance the Value Relevance of Information? Evidence from Sri Lanka

et al. 2020

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This paper examines the relationship between the level of integrated reporting (IR) based on the extent of adoption of the International Integrated Reporting Framework (IIRF) and the firm value (a proxy for value relevance of IR) in Sri Lanka, where the adoption of IR is a voluntary exercise. Using a comprehensive disclosure checklist, 117 integrated reports were content-analyzed, and then two regression models assessed the value relevance of IR disclosure. The study notes an increasing trend toward the adoption of IIRF in the preparation of integrated reports overall, as well as of each content element of IIRF. However, this rising trend has not significantly impacted the firm value by itself. Hence, this study’s findings do not support the enlightened stakeholder’s view on the subject of IR in Sri Lanka. Instead, it shows a significant positive relationship with the firm value when combined with the information on earnings (earnings per share), indicating that IIRF-compliant IR improves the value relevance of accounting information. This study offers insights for policymakers, professional accounting bodies, and practitioners on how investors make use of the information disclosed in integrated reports in their decision-making.

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Environmental Management Accounting Practices and their Diffusion: The Sri Lankan Experience

Cited by 20 publications

References 27 publications

Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting

Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting

Does Corporate Governance Affect the Quality of Integrated Reporting?

Does Integrated Reporting Enhance the Value Relevance of Information? Evidence from Sri Lanka

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