The impact of environmental management accounting (EMA) on financial performance of selected Philippine-listed companies in the industrial sector

• Main Authors: Bautista, Gianfranco Miguel V., Cuenca, Camil Karen B., Ducay, Lynne Kirsty A., Rojo, Jessa Mae
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Corporations > Philippines > Finance; Industries > Environmental aspects > Philippines; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6820
• Institution: De La Salle University

This paper focuses on the impact of environmental management accounting (EMA) on financial performance of selected Philippine-listed companies in the industrial sector. The ex post facto research design and purposive sampling method were used in this study. Data for the research was collected from available public disclosures of the 35 listed companies. With the aid of Stata 14.0, the panel regression analysis was explored to test the formulated hypotheses. An investigation was undertaken to examine the possible relationship between environmental costs broken down into four cost categories: (1) material cost of product output, (2) material cost of non-product output, (3) waste and emission treatment cost, and (4) prevention and other environmental management costs and two selected indicators of financial performance: return on equity (ROE) and EBITDA margin of companies belonging in the industrial sector. The empirical results indicate that the application of environmental management accounting neither improves nor restrict growth of financial performance of observed companies in the Philippine industrial sector. It appears, however, that a significant relationship between the tested variables exists in the chemical subsector as well as in the food, beverage, and tobacco subsector. Specifically, material cost of product output and waste and emission treatment cost affect ROE of companies belonging in the chemical subsector while, EBITDA margins of companies in the food, beverage and tobacco subsector are significantly affected by prevention and other environmental management costs. Based on this results, the researchers recommend that future research use both financial and non-financial independent variables to further investigate the relationship between EMA and financial performance.