Environmental Management Accounting Practices: A Survey of ISO 14001 Certified Malaysian Organizations

Abstract

In order to react to the demand of environmentally conscious society, organizations must incorporate environmental agenda in their corporate strategy. The adoption of environmental management accounting practices would help organizations to realize significant cost saving, enhance competitiveness and improve performance. However, some studies revealed organizations which implemented environmental management accounting practices were unable to realize the benefits. Due to the inconsistency of the previous studies’ results, this study aims to shed light on the environmental management accounting practices, competitive advantage and organizational performances in ISO 14001 certified Malaysian organizations. An online survey was utilized for the collection of data, in which the views of top management and relevant key personnel involved in environmental management in these organizations were sought. Environmental management accounting activities and environmental management system were used as the proxy for environmental management practices. The theory of resource-based view had been employed to provide the premise to explore the variables. The findings from this study showed that ISO 14001 certified organizations are actively asserting their role as responsible social players and the perceived environmental concerns has become an integral part of their routine operations, which clearly revealed organizations’ continuous commitment towards environmental responsibility.  Further to that, the findings from this study revealed that environmental management accounting practices enabled organizations to achieve competitive advantage and improve their performances.

Keywords: environmental management accounting practices, environmental management accounting activities, environmental management system, organizational performance, survey