Organizational Determinants of Environmental Management Accounting Adoption: Evidence from Malaysian Local Councils
Abstract
Despite the numerous benefits that environmental management accounting (EMA) offers, its adoption by the public sector in developing countries seems to be progressing slowly. Therefore, the purpose of this paper is to examine the organizational determinants influencing the adoption of EMA by Malaysian local councils. A self-administered questionnaire survey was conducted among accountants at local councils in Peninsular Malaysia using a consensus approach. The questionnaire items are based on prior studies on EMA adoption. The results suggest that an internal environmental committee plays a significant role in encouraging local councils to adopt EMA. This committee is responsible for planning, monitoring, measuring, and reporting environmental performance, for which EMA is needed to provide pertinent information. The research provides an impetus for other local councils to set up their in-house environmental committee to promote EMA adoption and subsequently improve the generation of information for more accurate measurement of environmental performance. Since research on EMA adoption in the public sector is relatively scarce, it contributes to a limited understanding of the internal and external factors that influence its adoption. Therefore, the paper offers useful insights to relevant authorities, such as federal and state governments, on policy changes that could enhance EMA adoption within public sector organisations.
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