Environmental Management Accounting Implementation and Environmental Performance through Enhanced Internal Process Innovation

Zarinah Abdul Rasit, Nur Fasharina Hamidon, Indarawati Tarmuji, Nadiah Abdul Hamid and Norfadzilah Rashid

Growths in the global business relevant to the environmental perspectives has created concern for companies to integrate environmental aspects into their business management systems. In complying with the current environmental legislation, business and stakeholders demands, many companies are now incorporating environmental aspects in their operation. Drawing on the resource-based theory, this research seeks to examine the effect of environmental management accounting practices towards change in process innovation and environmental performance. Additionally, there is still limited research examining the implication of EMA practices towards performance among the Malaysian companies. This research focuses on the potential effects of EMA on internal process innovations and environmental performance. Data were gathered using a mail questionnaire survey from 98 randomly selected Malaysian manufacturing firms and the relationship was analysed using correlation and simple regression analysis. Findings from the research found that the implementation of EMA which covers monetary and physically oriented EMA would lead to enhance environmental performance. Nevertheless, this research provides evidences that the relation between EMA and environmental performance is mediated by firm process innovation. These findings provide evidences that the implementation of EMA practices may encourage further innovation to the internal process, which may help firms to enhance environmental performance.

Volume 12 | Issue 1

Pages: 46-55

DOI: 10.5373/JARDCS/V12I1/20201007