A critical evaluation of environmental management accounting (EMA) tools used by 3-5 star hotels in KwaZulu-Natal.
Nyide, Celani John.
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The use of environmental management accounting (EMA) remains debated in South Africa and the literature reveals that EMA is still at an infancy stage in the emerging economies, including South Africa. Currently, there is limited existing research on environmental management accounting practices available for use by the hotel sector in South Africa. Several studies maintain that conventional management accounting systems generally fall short of adequate data required for the administration of the environment. The overall aim of this study was to, therefore, investigate and describe the use of the environmental management accounting tools by the hotel sector in the 3-5 star categories in KwaZulu-Natal. The research was an exploratory study and qualitative in nature using a single case study with embedded units approach. ABC Hotel Management Group formed part of this study along its 3 hotels (2 located at Umhlanga and 1 located at Durban North) which met the selection criteria. This approach was considered appropriate so as to develop a rich and deep understanding of the use of EMA tools in the hotel sector. In-depth semi-structured interviews comprised the main method of data collection. There were 10 participants in this case study which included the group engineer, who is the main custodian of the Group’s environmental management systems, 3 general managers, 3 financial managers, and 3 maintenance managers. Additional documents were analysed which included financial statements, policy documents, the Group website, the hotels’ websites, Group Energy profile Analysis (GEPA) programme, and Building Monitoring Systems (BMS). This study adopted a judgement purposive sampling because the study selected sample members that conform to some criterion. The hotel had to have an already developed environmental management system. Therefore, it had to have either a Green Leaf Eco Standard certification, Heritage Environmental certification or Fair Trade Tourism certification. The sample also consisted of hotel employees who occupy certain positions of responsibility relating to the management of the environment within the hotels. The results of this research revealed that the hotel Group is aware of the environmental challenges which include energy and water consumption and waste management. These results are consistent with the literature review. The study showed that the Group developed the GEPA and BMS technologies to provide an environmental account in both physical and monetary units. This constitutes the use of integrated EMA tools, namely, Environmental Cost Accounting (ECA) and Material Flow Cost Accounting (MFCA). However, the study established a number of factors that drive and/or hinder the implementation of EMA tools that would control and manage environmental costs and their root causes. The adoption of a prototype EMA model by the hotel sector is then suggested by the study.