An exploration of environmental management accounting policies and practices at a higher education institution in KwaZulu-Natal.

Abstract

Universities have a role to play in the preservation of the environment and this study attempted to evaluate the environmental management accounting processes at the University of KwaZulu-Natal (UKZN). UKZN, a South African university generates the same direct and indirect environmental impacts as the higher education sector worldwide. This is significant within the context of the South African environment which is constantly plagued by having to effectively manage the already scarce resources of water and energy, evident through imposition of water and energy restrictions over the recent years. The study’s aim is to increase awareness of having a structured approach to environmental management, in order to achieve the strategic environmental goals of the university. The research studied the experiences of key managers within UKZN, with the purpose of exploring the potential factors which influence the decision to adopt and apply environmental management accounting (EMA) within the higher education sector. The study comprised two objectives, namely understanding the current state of accounting practices for managing major environmental costs and identifying factors influencing EMA adoption within the university. The study adopted a case study approach, comprising semi-structured interviews of key personnel involved in Management Accounting, Environmental Management and Academic Schools within the university. Content analysis was performed on the transcribed interview data. A theoretical framework derived from literature was adopted to guide data collection and focus the study. Contingency and institutional theory was the resultant basis of the derived framework. The findings of the first objective revealed that there is a distinct lack of EMA utilisation within the university. There is no distinct policy on EMA, resulting in minimal environmental cost information being brought to the attention of senior management. The university embraces the principles of environmental sustainability however efforts to improve internal environmental accountability primarily from an accounting perspective are absent. The findings of the second objective revealed that five key barriers contributed to the lack of EMA utilisation within the university. The barriers are attitudinal, informational, institutional, technological, and lack of incentives (financial). The results and findings of this study supported the use and application of EMA, within the higher educational sector. Participants concurred that EMA is underutilised and if implemented would realise significant benefits for both the university and environment. Environmental management accounting is being widely acknowledged as a key management tool that can facilitate improved financial and environmental performance via the concept of enhanced environmental accountability. Historically, research has been concentrated primarily on the manufacturing industry, due to it generating the greatest proportion of environmental impacts. Service industries are also an integral component of environmental management as they contribute significant environmental impacts, both direct and indirect. Educational institutions such as universities form part of the service sector and directly impact on the environment through the consumption of paper, energy and water, as well as solid waste generated, with the associated demands. Keywords: Environmental management accounting, environmental impacts, higher education, Southern Africa.