FACTORS INFLUENCING ADOPTION OF ENVIRONMENTAL MANAGEMENT ACCOUNTING (EMA) PRACTICES AMONG MANUFACTURING FIRMS IN NAIROBI, KENYA

Abstract

EMA is concerned with the accounting information needs of managers in relation to corporate activities that affect the environment as well as the environment-related impacts on the corporation. It is an area that has developed over decades to try to link to innovative strategies and corporations have also used it as an environmental performance indicator (EPI) to measure environmental performance. The study aimed at contributing towards extant literature by establishing the factors influencing adoption of Environmental Management Accounting (EMA) practices among manufacturing companies in Nairobi, Kenya.The study sought to establish whether the financial value, financial status, staff knowledge and policy guidelines on EMA influence adoption of Environmental management accounting practices among manufacturing firms in Kenya. The study is significant to the managers of corporate entities that operate in the manufacturing sector, Local government and environmental regulatory agencies and the primary stakeholders to a firm. The researcher used a mixed research design approach of both quantitative and qualitative research design. Demographic data of the firms used in the survey was presented in tables. Data was analyzed using descriptive statistics for data based on scales and regression analysis using Statistical Package for Social Sciences (SPSS) software for data relating to contextual variables influence on EMA adoption. Regression of coefficients results in table show that Financial Value and Adoption of EMA are positively and insignificant related. The results further indicate that Financial Status and Adoption of EMA are positively and significant related. It was further established that Staff Knowledge were positively and significantly related to Adoption of EMA. Similarly, results showed that Policy Guidelines and Adoption of EMA are positively and insignificantly related to Adoption of EMA. The study recommended that companies should always encourage EMA practices consistently. This is because continuous adoption of EMA leads to increased financial performance as well thus promoting the company’s portfolio image.