The Effect of Environmental Management Accounting and Control System Integration on Sustainability Orientation through Sectoral Green Economy Mediation

Abstract

The orientation of sustainability within the scope of the company refers to the company's efforts to create long-term value by taking into account the social, environmental and economic impacts of the company's business activities. To achieve the goals of organizational development, companies must carry out effective environmental management. Company activities that are inseparable from natural resources must pay attention to the condition of the surrounding environment so as not to cause damage to the environment. The purpose of this study is to analyze how far the influence of environmental management accounting factors and the integration of control systems on the company's sustainability orientation. Then in this study will also analyze the effect of sectoral green economy as a mediating factor. The use of green economy sectoral factors aims to create an economy that also focuses on environmental protection. The research method used is a quantitative research method. The number of samples used in this study were 512 respondents. Respondents who were sampled were managers and employees of state-owned, mining & plantation companies in Indonesia. The sampling technique used was purposive sampling technique. Then the data were analyzed using SmartPLS software. From the results of the research above, it can be concluded that the environmental management accounting and control system integration variables have a significant effect on sectoral green economy and sustainability orientation. Then the sectoral green economy is also capable of being a good mediating factor in bridging the influence of environmental management accounting and control system integration on sustainability orientation.

A Framework on Setting Strategies for Enhancing the Efficiency of State Power use in Thailand’s Pursuit of a Green Economy

“…Ananda et al (2023) assessed smallscale reservoir management's sustainability by considering ecological, social, and economic factors. Pramono et al (2023) evaluated a company's commitment to long-term value creation by integrating environmental management accounting (EMA) and control system integration (CSI), with a focus on sectoral green economy (SGE). Kasayanond et al (2019) highlighted the role of energy awards in promoting sustainability and environmental responsibility among high technology-based companies in Malaysia.…”

Management Control Systems and Sustainability: A Bibliometric Analysis

“…Additionally, these tools improve the reliability of sustainability disclosures, enabling more effective communication with external parties and fostering greater stakeholder engagement [39]. For Pramono et al [1], companies can also obtain additional benefits from sustainability management control tools, such as boosting the company's credibility and reputation and enhancing employee satisfaction and engagement. According to Traxler et al [40], if organizations have a sustainability report but do not implement proper control mechanisms for sustainability, they run the risk of their efforts being perceived, at best, as a well-intentioned attempt at reputation-building.…”

“…Integrating sustainable MCS into operations is important to ensure the company's business runs effectively and efficiently [43,44]. Then, according to Pramono [1], by integrating control systems, organizations can ensure their operations remain environmentally friendly and sustainable. MCS can play an essential role in constructing sustainability indicators, mainly due to the availability of adequate and manageable information that guides organizations [45].…”

“…To work for a lasting future and obtain competitive advantages, sustainability and the balance between economic, social, and environmental issues must be present in the organizational management and business sectors. The company's sustainability orientation refers to its efforts to create long-term value by considering its business activities' social, environmental, and economic impacts [1,2].…”