Environmental activity management: its use and impact on environmental performance

Abstract

Purpose

The study provides an insight into the application and usefulness of activity management (AM) principles in an environmental context. Specifically, the purpose of this paper is to examine the extent of use of environmental activity management (EAM) utilising Gosselin’s (1997) three levels of AM (namely, environmental activity analysis (EAA), environmental activity cost analysis (EACA), and environmental activity-based costing (EABC)). The study also examines the association between EAM and environmental performance, and the role of decision quality as a mediator in this relationship.

Design/methodology/approach

Data were collected from 208 Australian organisations across different industries using a mail survey questionnaire.

Findings

The results indicate a relatively high extent of EAA use but a low extent of use of EACA and EABC. In addition, organisations using each level of EAM to a greater extent were found to experience higher levels of environmental performance. Furthermore, the relationship between EAA and EABC with environmental performance was found to be mediated by decision quality.

Practical implications

The findings suggest that organisations should endeavour to increase their use of EAM, and modify their existing costing systems to consider the drivers and costs of environmental activities.

Originality/value

This is the first study to empirically examine the extent of use of EAM and its association with environmental performance.

Citation

Phan, T.N., Baird, K. and Su, S. (2018), "Environmental activity management: its use and impact on environmental performance", Accounting, Auditing & Accountability Journal, Vol. 31 No. 2, pp. 651-673. https://doi.org/10.1108/AAAJ-08-2016-2686