The past decade has seen a rapid increase in environmental management accounting (EMA) research. The role of EMA in facilitating the incorporation of environmental considerations into business decision‐making activities and processes has been acknowledged, investigated, analysed and debated, largely in Western industrialised nations. In contrast, Environmental Management Accounting: Case Studies of South‐East Asian Companies, a newly published book, is devoted to EMA in developing countries. Asia is the fastest growing emerging market, but at the same time its rapid economic growth has created unprecedented environment degradation. This book, therefore, carries great significance for regulators, business managers, researchers and other stakeholders who need to understand critical environmental challenges in South‐East Asian countries and assist in finding solutions.
The book consists of 12 comparative case studies in four emerging countries: Indonesia, the Philippines, Thailand and Vietnam. The case companies selected each differ in size and industrial sector to facilitate generalisation and systematisation of findings. Each case study begins with an analysis of the existing context of EMA applications and continues constructively by working with company managers to identify the ways of implementing EMA. Drawing upon these case studies, the book explores the opportunities and usefulness of EMA in supporting business decision‐making and how different organisational and institutional environments influence the implementation of EMA in South‐East Asian companies.
While the application of social and environmental accounting in South‐East Asian companies is at an early stage of development, the book reveals great variety of EMA use across the set of companies studied. There is no generic EMA tool or approach that is applicable for all businesses. Rather, EMA tools interact and complement each other to help meet different decision needs. For example, an integration of monetary EMA (MEMA) and physical EMA (PEMA) tools was found in a towel production firm in Indonesia, which enabled the company to measure and improve its eco‐efficiency; a linkage between ex post and ex ante EMA information use was found in a family‐owned rice milling business in the northern Philippines to support its environmental investment appraisal in the context of the emerging market for carbonised rice husk. Analysis indicated that diversity in EMA applications seems to be related to different economic, technical, institutional and political rationales. Consistent with many Western studies (Henri and Journeault, 2010; Guenster et al., 2011), the search for economic benefits was identified as an important driver for the EMA implementation. “Economic efficiency represents a core motivation of owners and senior managers, as well as internal stakeholders such as environmental or quality managers for applying EMA” (p. 288). However, as EMA information is largely anchored to actual environmental operations, EMA tools have also been used to justify or support measures of environmental effectiveness such as reduction of freshwater consumption, carbon emissions, toxic waste or smoke pollution, etc. Within its unique cultural context, social normative rationality, which focuses on concepts and notions of corporate social responsibility or corporate citizenship, was found to be a very important driver for larger internationalised South‐East Asian companies, but was less evident in smaller localised companies. Although the enforcement of environmental regulation was not found to be strong, in some cases where political support was seen as a key success factor, legitimacy and conformity with political expectations were important drivers for EMA application and environmental improvement in general.
This publication contains several unique features and strengths. First, the decision settings and tools investigated in this book are built upon the EMA framework developed by Burritt et al. (2002). The distinguishing feature of the EMA framework is its focus on different dimensions of accounting information, i.e. the time frame of information (past vs future‐orientated information), the length of time frame (short‐term vs long‐term information), and the routineness of information provision (regularly vs ad hoc collected information). These distinguishing dimensions of EMA and the relationships between these dimensions are thoroughly explored and patterns revealed for each case investigated. Such exploration is distinctive in nature and provides theoretical as well as practical insights for corporate EMA studies. Second, the focus on South‐East Asia is a timely response to the call for more social and environmental accounting research in developing nations (Welford, 2005). Clearly, the institutional settings, economic standing and technology development in Asian developing countries are significantly different from developed countries. This book extends the research literature by developing knowledge and empirical evidence of EMA applications in South‐East Asian economies. Third, instead of simply copying Western studies and applying their models in the Asian context, or simply criticising the problem of corruption and ineffectiveness of commend‐and‐control regulation for environmental management, the book investigates environmental challenges through the views of Asian business managers and highlights the need for a balanced policy mix (combining voluntary and mandatory approaches) to accomplish a multi‐ and inter‐disciplinary EMA task.
Recognised limitations of the book may open up new research opportunities in the future. For example, the EMA framework is examined separately for each individual case. This leaves open the question of to how changes in EMA application and dynamic shifts between applied EMA tools can best be captured and represented in different cases over time. In diagrammatic terms, this could be the next challenge for all business. In terms of theoretical foundations, the book does not explicitly adopt any theory, although it appears that institutional theory has much to offer, along with diffusion of innovation theory. These theoretical perspectives may be useful in clarifying further questions in relation to the main conclusion, such as how have frequent policy and regulation changes in emerging economies impacted on EMA practice; how are companies modifying their existing accounting practices to incorporate EMA in the face of institutional as well as social political changes, and how does the accommodation of new changes and challenges differ between companies, which could lead to different performance outcomes? Nevertheless, this new publication is certainly enjoyable reading because it brings researchers and business practitioners a step closer to jointly solving environmental problems within the context of economic growth and environmental destruction.
