Factors Affecting the Implementation of the Environmental Management Accounting and the Impact on the Performance of a Construction Company in Malaysia

Environmental issues are very significant among the construction industry because construction activities affect the environment. Pressure on construction companies to be more responsible for conserving the environment is increasing. Practice of environmental management system (EMS) is part of efforts to improve environmental management. Environmental management accounting (EMA) is a new EMS tool to trace and identify the environmental cost and the movement of physical environment. The implementation of EMA in the construction industry in Malaysia is still at a moderate stage as it is believed that EMA increase the costs and lead to decrease of economic performance of the organizations. In addition there are various factors that influence the implementation of EMA and the suitability factor in an organization is essential to ensure the ability of EMA to improve the environmental and organization performance. This study focus on factors that influence EMA in the construction industry in Malaysia and to determine the relationship between EMA and environmental performance as well as economic performance of the organizations. Data obtained through survey method using questionnaire and analyzed based on Structured Equation Model (SEM) using AMOS software. The respondent consists of 189 accountant from construction company registered with CIDB with registration grade of G7. Studies have shown that external factors and internal factors have significant direct relationship with EMA, EMA also have significant direct relationship to environmental performance and economic performance of the organization. Environmental performance and economic performance of the organizations also have significant direct relationship. Implications of the research shows the implementation of EMA was able to improve environmental performance and economic performance of the organization. EMA should be implemented by construction companies to preserve the environment as well as improving the economic performance of the organization.