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Carbon emission risks and management accounting: Australian evidence

Carbon emission risks and management accounting: Australian evidence PurposeThe purpose of this paper is to apply regulatory mix theory as a framework for investigating the use of management accounting techniques by Australian large listed companies in constraining their carbon emissions.Design/methodology/approachSemi-structured interviews are conducted with senior managers involved with managing their companies’ carbon emission risks. Analysis of the interview data is undertaken with a view to provision of insight to the impact of the regulatory framework imposed to deal with carbon emissions.FindingsThe findings reveal that regulation impacting companies’ economic interests rather than requiring mere disclosure compliance is much more likely to be behind focusing top management and board attention and use of management accounting techniques to set targets, measure performance and incentivise emission mitigation. However, there remains much scope for increased use of accounting professionals and accounting techniques in working towards a carbon-constrained economy.Research limitations/implicationsThe usual limitations associated with interpretation of interview data are applicable.Practical implicationsUnder-use of management accounting techniques is likely to be associated with less than optimal constraint of carbon emissions.Social implicationsCarbon emissions are accepted as being involved in harmful climate change. To the extent effective techniques are under-utilised in constraining emissions, harmful consequences for society are likely to be heightened unnecessarily.Originality/valueThe topic and data collected are original and provide valuable insights into the dynamics of management accounting technique use in managing carbon emissions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting Research Journal Emerald Publishing

Carbon emission risks and management accounting: Australian evidence

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1030-9616
DOI
10.1108/ARJ-03-2015-0040
Publisher site
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Abstract

PurposeThe purpose of this paper is to apply regulatory mix theory as a framework for investigating the use of management accounting techniques by Australian large listed companies in constraining their carbon emissions.Design/methodology/approachSemi-structured interviews are conducted with senior managers involved with managing their companies’ carbon emission risks. Analysis of the interview data is undertaken with a view to provision of insight to the impact of the regulatory framework imposed to deal with carbon emissions.FindingsThe findings reveal that regulation impacting companies’ economic interests rather than requiring mere disclosure compliance is much more likely to be behind focusing top management and board attention and use of management accounting techniques to set targets, measure performance and incentivise emission mitigation. However, there remains much scope for increased use of accounting professionals and accounting techniques in working towards a carbon-constrained economy.Research limitations/implicationsThe usual limitations associated with interpretation of interview data are applicable.Practical implicationsUnder-use of management accounting techniques is likely to be associated with less than optimal constraint of carbon emissions.Social implicationsCarbon emissions are accepted as being involved in harmful climate change. To the extent effective techniques are under-utilised in constraining emissions, harmful consequences for society are likely to be heightened unnecessarily.Originality/valueThe topic and data collected are original and provide valuable insights into the dynamics of management accounting technique use in managing carbon emissions.

Journal

Accounting Research Journal – Emerald Publishing

Published: Jul 4, 2016

References

  • The Australian carbon tax: a step in the right direction but not enough