Linking Awareness to Organizational Readiness: Evidence on Green Accounting Adoption among Motor Vehicle SMEs in the Philippines
DOI:
https://doi.org/10.64137/31080030/IJFEMS-V2I4P102Keywords:
Green Accounting, Sustainability Accounting, Organizational Readiness, Smes, Environmental Accounting, Corporate Social ResponsibilityAbstract
The increased emphasis on sustainability globally has provided companies with an incentive to adopt environmentally responsible practices within their daily operations and financial reports. One of the practices being adopted is green accounting, which is a method used by companies to incorporate into their decision-making process the cost of harming the environment as well as other sustainability-related issues. However, even though there has been a great deal of interest internationally regarding the adoption of green accounting, it appears that green accounting is still not commonly practiced among Small and Medium size Enterprises (SMEs), especially in developing countries, due to a lack of knowledge, technical expertise and institutional support. The objective of this research was to investigate the association between awareness of green accounting concepts and organizational preparedness to implement green accounting systems in Small and Medium-sized Enterprises (SMEs) that provide motor vehicle services in Dumaguete City, Philippines. The research is based on two theories: Stakeholder Theory and Institutional Theory. A quantitative, descriptive/correlational approach to conducting research was used to collect data. A structured questionnaire was distributed to 96 owners, managers, and/or other employees who are authorized to represent their respective organizations. The analysis of the data included descriptive statistics, Spearman’s Rank Correlation, and Simple Linear Regression Analysis. The study's results demonstrated that the respondents were aware of green accounting principles and frameworks at a low to moderate level; however, their organizations were prepared to implement green accounting at a moderate level. Additionally, there was a statistically significant, positive correlation between the awareness of respondents and the preparedness of their organizations to use green accounting practices (rs = 0.463, p < 0.001). Finally, regression analyses indicated that the awareness of respondents predicts the organization's preparedness to adopt green accounting practices, and it accounted for 21.4 percent of the variance in preparedness. The study showed that awareness was the primary driver for an organization's ability to prepare for implementing sustainable-oriented accounting practices. Nevertheless, awareness alone will not be enough to implement green accounting practices successfully within an SME. There must also be institutional support, manager commitment, sufficient funding, and access to necessary technology to successfully implement green accounting practices.
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