The Dynamic Association of Energy, Environmental Management Accounting and Green Intellectual Capital With Corporate Environmental Performance and Competitive

Abstract

The current study aims to investigate the impact of energy efficiency (EE), green intellectual capital (GIC) and environmental management accounting system on environmental performance and competitive advance in Indonesia manufacturing industry. In doing so, we utilized the sophisticated methodology of partial least squares structural equation modeling (PLS-SEM) to identify the potential association among the variables of interest. Even after the growing consciousness for environmental management, there exist some companies that consider the acceptance of environmental trend as an obstacle to their growth and performance. The results confirm that all selected variables have a positive and significant impact on environmental performance and competitive advantage in the manufacturing industry in Indonesia. Moreover, the outcomes of the PLS-SEM confirm that environmental performance and competitive advantage have positively and expressively impacted by green intellectual, EE and environmental accounting system. In general, the results of PLS confirm that the three factors, i.e., GIC, EE, and environmental accounting management system are the positive and significant contributor to enhance the environmental performance and competitive advantage of the firm in Indonesia manufacturing industry.

Green Intellectual Capital – A Comprehensive Review and Opportunities for Future Research

“…As proof, we can cite the work of Khan et al, (2021) and Yadiati (2019) who claimed that investing in GIC will significantly assist firms in obtaining environmental outcomes. In the same vein, Song and Yu (2018) and Sidik et al, (2019) stressed that green performance is positively influenced by green intangibles. Moreover, in their study, Yusliza et al (2020) also considered GIC as a significant driver to environmental performance.…”

“…To clarify the last result, further research is needed to discover why green organizational asset does not directly contribute to better positioning in the market. More recently, Sidik, et al, (2019) have performed an analysis of 127 SMEs in the manufacturing sector of Indonesia. The paper demonstrates that if importance has been given to GIC, energy efficiency and environmental management accounting system, those will create a competitive position for the organization.…”

“…Although the favorable results obtained by implementing GIC have been confirmed by several researchers, some companies still think about it as a barrier to their growth and performance (Sidik, et al, 2019). Moreover, Wang and Juo (2021) claimed that the link between green performance and financial benefits is perceived as a trade-off, managers thinking about it more like an expense than as a worthy investment.…”

A systematic literature review of current understanding and future scope on Green Intellectual Capital

“…Every nation has been actively indulging in preserving the environment and environmental resources with the help of socially responsible investment so that future generations can have a safe future. Sustainability goals can only be attained through the communities and corporations' joint collaboration (Sidik, 2019). Nowadays, communities are also turning out to be more concerned and conscious about environment and environment protection guidelines persuade organisations to concentrate more on sustaining and managing environment (Chen, 2008).…”

“…Chen delineated GIC as "total stocks of all kinds of intangible assets, knowledge, capabilities, and relationships, etc. about environmental protection or green innovation at the individual level and the organisational level within a company".As per Sidik (2019), GIC is a powerful, efficient apparatus for companies, a summation of personnel skills and talent to accelerate the environment savvy output of companies. Amplification of environmental consideration at global level triggered organisations to enhance sustainable practices which in turn led to relying more on Green Intellectual Capital.…”