Abstract
Stakeholders are paying increasing attention to how well organisations respond to environment-related issues and communicate with them. While efforts are being made by companies in the industrial sector by adopting Environmental Management Accounting (EMA), little is known about how service organisations particularly universities in Nigeria embrace the adoption of EMA in their operations. This exploratory study reviews extant literature to make case for Nigerian universities to embrace EMA and report on environmental concerns arising from their activities. The main objective of the study, therefore, is to find out whether or not EMA can be adopted by Nigerian universities. If so, what barriers mitigate its adoption? Based on a literature review about universities in other climes that have embraced EMA and the experience of the lead author as an erstwhile Bursar of a Nigerian university, it is concluded that Nigerian universities have the economic and human potential to adopt EMA. The barriers to its adoption are extrapolated to include lack of awareness of environmental costs, lack of top management support, absence of institutional pressure, environmental policy, and a robust accounting system. The study recommends awareness creation via seminars and workshops for top management staff and other staff of the universities, incorporating environmental accounting courses in the curriculum of universities by the National Universities Commission (NUC), as well as integrating them into current accounting systems of the universities, accounting package such as SAGE 50/100 that can identify and classify the environmental costs and attach them to responsibility centres.
Keywords: Accounting systems, environmental costs, environmental management accounting, Nigerian universities, responsibility centres
Introduction
The purpose of accounting is to provide credible financial information to users for economic decision-making. External users rely on accounting information provided by Financial Accounting while Management Accounting provides information to internal users. Unfortunately, these conventional financial and management accounting practices have failed to provide environment-related information that can help in enhancing organisational financial and environmental performance (Chang, 2007). This is because they fail to capture environmental costs and allocate them to responsible processes/products but instead lump them in general overheads leading to costs inefficiency.
To avoid this inefficiency, many companies now embrace Environmental Management Accounting (EMA) which helps them to trace and track environmental costs (pollution, water, and energy consumption) which are on the increase. EMA is an accounting system where in addition to other costs, environmental costs are identified, collected, measured, and analysed and such information is communicated to stakeholders which enhances the environmental responsiveness of the organisation. Universities as service organizations are citadels of learning whose operational activities also impact the environment especially water, paper, and energy consumption and waste treatment. However, little is known about how universities in emerging economies like Nigeria manage these costs using an environmental management accounting system.
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