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Environmental management accounting and innovation: an exploratory analysis

Environmental management accounting and innovation: an exploratory analysis Purpose – Increased awareness regarding environmental issues has encouraged organisations to use environmental management accounting (EMA), which has been said to deliver many benefits to users, including an increase in innovation. There is, however, little evidence to consubstantiate this claim and thus this paper aims to investigate the issue. It also seeks to examine the role of strategy with EMA use and innovation. Design/methodology/approach – The paper uses a survey designed and administered to management accountants and financial controllers in large Australian businesses. Findings – The analysis suggests that EMA use has a positive association with process innovation, but not with product innovation. It also finds that the effect of strategy on innovation was driven by the level of commitment to research and development. However, no statistically significant relationship between strategy and EMA use was found. The key driver of EMA use was industry. Research limitations/implications – The small sample size is the most important limitation of this study and affected the statistical power of the analysis conducted. The results need to be interpreted with caution. Practical implications – The study suggests that EMA use is associated with process innovation, implying that economic benefits may be realised by using this technique, while simultaneously enhancing environmental performance. Originality/value – This is the first study to provide cross‐sectional evidence of the relationship between strategy, EMA use and innovation. It is also the first to propose a research instrument to measure EMA use as a multi‐item construct. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting Auditing & Accountability Journal Emerald Publishing

Environmental management accounting and innovation: an exploratory analysis

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References (115)

Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09513571011080180
Publisher site
See Article on Publisher Site

Abstract

Purpose – Increased awareness regarding environmental issues has encouraged organisations to use environmental management accounting (EMA), which has been said to deliver many benefits to users, including an increase in innovation. There is, however, little evidence to consubstantiate this claim and thus this paper aims to investigate the issue. It also seeks to examine the role of strategy with EMA use and innovation. Design/methodology/approach – The paper uses a survey designed and administered to management accountants and financial controllers in large Australian businesses. Findings – The analysis suggests that EMA use has a positive association with process innovation, but not with product innovation. It also finds that the effect of strategy on innovation was driven by the level of commitment to research and development. However, no statistically significant relationship between strategy and EMA use was found. The key driver of EMA use was industry. Research limitations/implications – The small sample size is the most important limitation of this study and affected the statistical power of the analysis conducted. The results need to be interpreted with caution. Practical implications – The study suggests that EMA use is associated with process innovation, implying that economic benefits may be realised by using this technique, while simultaneously enhancing environmental performance. Originality/value – This is the first study to provide cross‐sectional evidence of the relationship between strategy, EMA use and innovation. It is also the first to propose a research instrument to measure EMA use as a multi‐item construct.

Journal

Accounting Auditing & Accountability JournalEmerald Publishing

Published: Sep 21, 2010

Keywords: Environmental management; Innovation; Australia; Management accounting; Corportate strategy

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