The application of environmental management accounting amongst KwaZulu-Natal's top businesses.
Sustainable development is often described in three dimensions, namely social, environmental and economic. Environmental Management Accounting (EMA) is a management accounting approach which brings the environmental impact of the process to the attention of the stakeholders whilst also looking at the economic aspect so as to control costs. While EMA’s application has been adopted widely in developed countries, does the same apply in South Africa? Seeking to understand the level of current EMA being conducted at the corporate level will assist government and corporations in South Africa to understand the factors encouraging better accounting sustainability. The focus of this study was confined to leaders of organisations operating in the KwaZulu-Natal (KZN) province of South Africa. Quantitative research was conducted on 40 organisations that operated in KZN. The organisations sampled ranged from small to large enterprises, and operated in a number of different industries. The study centred on analysing the organisation’s attitude towards environmental sustainability, the types of EMA reports generated and reasons for or against using EMA. The research revealed that the attitude by each organisation towards environmental sustainability was vital in encouraging organisations to implement EMA as a method of controlling pollution. The majority of organisations had applied some form of EMA in their KZN organisation. A major finding was that for those who chose to apply EMA, their most important reason was to control costs better. The second reason for applying EMA was legislation. Planned implementation of EMA was analysed and a number of specific industries and sizes of industries were highlighted for their implementation of EMA or lack thereof. This research is useful to the reader as it has analysed the current application of EMA to encourage sustainable development, identify the general obstacles encountered to application of EMA and recommend strategies that can be employed to overcome them. These recommendations include government involvement through education programmes to improve the understanding and attitude towards EMA. Secondly, government should pass legislation making environmental reporting a compulsory disclosure for all organisations. Organisations themselves should use advanced computerised recording systems to develop their application of EMA. Larger businesses should encourage and assist smaller organisations in their supply chains to become more active in their own environmental protection.