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

Abstract

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.

Green intellectual capital and environmental management accounting: Natural resource orchestration in favor of environmental performance

“…More importantly, under such circumstances, what is less clear is the nature of managerial processes whereby organizations can translate their environmental resources into enhanced performance. In this regard, the environmental accounting literature highlights the important role of environmental management accounting (hereinafter referred to as EMA) in supporting the management of organizations' environmental strategies and green resources (Gunarathne et al, 2021; Henri & Journeault, 2010; Tashakor et al, 2019). It is claimed that EMA can facilitate the transformation of organizations' environmental actions into superior performance through the effective alignment of organizational and behavioral structures with organizational goals and core value drivers (Henri & Journeault, 2010; Solovida & Latan, 2017).…”

A resource‐based view of green innovation as a strategic firm resource: Present status and future directions

“…However, successfully leveraging green innovation as a strategic resource may require buyer‐driven knowledge transfer mechanisms and knowledge acquisition capabilities within the firm (Awan, Arnold, et al, 2021; Awan, Nauman, et al, 2021), investment in research and development (Duque‐Grisales et al, 2020), support from top management to establish technological capabilities (Awan, Sroufe, et al, 2021; Forcadell et al, 2021), cross‐functional integration within the firm, development of a network of strategic partners (Dangelico, 2016) and implementation of green marketing programmes (Han et al, 2019). Firms, on the one hand, recognise sustainability initiatives for developing strategic resources from committed relationships with stakeholders and a positive reputation for the firm (Bangsa & Schlegelmilch, 2019; Brulhart et al, 2019; Gunarathne et al, 2021). For instance, firms prioritising sustainability initiatives often receive an optimistic assessment from financial analysts, which, in turn, helps attract long‐term investments (Durand et al, 2019; Jia et al, 2020).…”

The ABC‐LCA method for the integration of activity‐based costing and life cycle assessment

“…Chaudhry and Amir (2020) have shown the positive role of institutional pressure in the implementation of environmental management tool, whereas Gunarathne, Lee, and Hitigala Kaluarachchilage (2020) demonstrated the positive influence of environmental accounting tools for environmental and economic performance of organisations.…”