Abstract:
The aim of this research paper is to examine the Environmental Management Accounting (EMA) practices
in achieving financial performances in listed manufacturing companies in Colombo Stock Exchange (CSE).
This is an exploratory study based on analyzing primary and secondary data to answer the research problem
of how does the application of EMA relate with financial performance in the listed manufacturing companies
in Sri Lanka. Literatures bordering on the areas of EMA practices were reviewed. A well designed
structured questionnaire was used to collect the primary data. EMA application is employed as independent
variable and parameters were used to measure the independent variables such as environmental information,
environmental evaluation, environmental cost savings and environmental laws where as financial performance
is the dependent variable profitability and revenue growth were used to measure the dependent
variable. Top level, middle level and lower level of managers of the 39 manufacturing companies which are
listed in CSE have been sampled. Correlations and multiple regression analysis have been used to analyze
the data. Results reveal that there is a statistically significant positive relationship between practices of EMA
and financial performance. The results of this study provide directions towards building a strong knowledge
base for future EMA development. The results suggest that government should establish legal and regulatory
framework for environmental issues. This research paper makes an original contribution to the growing
body of empirical studies on practices of EMA in Sri Lanka.