Environmental Management Accounting and Environmental Performance: Strategic Drivers, Enablers and Mediating Roles

Abstract

The study investigates the integration of Environmental Management Accounting into the functional-level environmental strategies and strategic outcomes of firms operating in environmentally sensitive sectors of Ghana. It specifically ascertains the mediating role of Environmental Management Accounting (EMA) in the relationship between Green Human Resource Management (GHRM) and Environmental Performance (EP). Besides, the study examines the impact of EMA on competitive advantage and EP. The sample comprises firms operating in the energy, manufacturing, transportation and waste management sectors. Using the Partial Least Squares Structural Equation Model (PLS-SEM) on firm-level data, the results reveal that EMA complementarily mediates the relationship between GHRM and EP, with physical EMA contributing more significantly than Monetary EMA to the total effect of GHRM on EP. This underscores the critical role of physical EMA in translating GHRM into improved EP. Furthermore, while physical EMA enhances competitive advantage, monetary EMA does not, and competitive advantage does not mediate the EMA-EP relationship. This finding suggests EMA can lead to improvements in EP independently of competitive gains. As a complement to the two quantitative papers above, the third paper of the thesis follows a qualitative research method relying on an exploratory case study of two power-generating firms (via 15 interviews with 24 senior managers). It assesses the motivation for CMA practices, carbon management strategies and the carbon performance of the firms. The result reveals that Carbon Management Accounting (CMA), a specific type of EMA, is driven by regulatory pressures, cost reduction, and the desire for competitive advantage. Institutional factors like debt finance and government ownership further influence CMA adoption. Both firms resorted to compliance strategies in an attempt to improve carbon performance. The thesis contributes to the literature by focusing on how functional-level strategies, rather than corporate strategies, interrelate to improve environmental outcomes. It also demonstrates the differential effects of the components of EMA in influencing these environmental outcomes, an area underexplored in the literature. Regarding policy implications, the study calls on policymakers to promote GHRM in organisations but give preference to PEMA tools and technologies amid resource scarcity. It further encourages policymakers to create an enabling economic environment that attracts eco investments into the country.