Barriers of environmental management accounting practices in developing country

Abstract

The use of environmental management accounting (EMA) benefits organisations by providing them with different information for decision-making (Burritt, Hahn, & Schaltegger, 2002; Adams & Zutshi, 2004; International Federation of Accountants IFAC, 2005). EMA has received increasing attention since 2000 and is now considered an effective tool for dealing with environmental issues and the economic performance of companies and countries (Elhossade, Abdo, & Mas’ud, 2021). This paper purposes to present an empirical case for research in EMA. The paper provides an analysis of the current status of EMA practices in manufacturing companies operating in Libya and identified the barriers preventing such practices. Data were collected from a sample of companies in Libyan manufacturing industry contexts utilizing a questionnaire survey. To analyse these data, two statistical techniques were employed: factor analysis and descriptive tools analysis. The current level of EMA adoption among manufacturing companies in Libya was found to be low. The findings of the study reveal that institutional barriers constituted the greatest obstacle to the adoption of EMA in manufacturing companies in Libya. This was followed by management barriers, informational barriers, financial barriers, and, lastly, attitudinal barriers. This paper concluded that Libyan universities should include EMA in the management accounting syllabus, provide books, and conduct research into practices related to EMA. Furthermore, the Libyan government and other stakeholders should play an active role in enacting and enforcing further strict environmental regulations and laws. This would be useful, as it would increase the concern of local communities about environmental issues; this would, in turn, make companies more concerned about improving their environmental performance.