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DOI: https://doi.org/10.33258/birci.v5i4.7261
Determinants of Environmental Performance: The Application of Environmental Management Accounting as a Mediation Variable
Iklima Pila Sopia1, Eva Herianti2, Siti Asmanah3
1,2,3Universitas Muhammadiyah Jakarta, Indonesia
[email protected], [email protected], [email protected]
I. Introduction
Appiah et al. (2019) explain that environmental management accounting (EMA) is increasingly important to apply in sustainable company research. Latan et al. (2018) it becomes the reason stakeholders’ increasing interest to focus more on environmental issues and performance. Some researchers identify conventional management accounting systems and practices that cannot provide information on environmental costs (Miswaty et al. 2020; Ong et al. 2020) and ignore environmental impact reports (Dissanayake &
Rajapakse 2020). To fill out this gap, environmental management accounting (EMA) is a valuable tool to solve this weakness (Ong et al., 2020). The use of EMA was first formally promoted in the early 1990s in the United States. Since then, many countries have adopted EMA (Ong et al., 2020). The objectives of adopting EMA for companies are for corporate sustainability (Dissanayake & Rajapakse 2020), especially in fulfilling the business demands or customer demands (Rasit et al. 2020). Then, it also complies with stringent environmental regulations to solve environmental problems (Surotenojo et al., 2019),
Abstract
Conventional management accounting cannot provide information about environmental costs and ignores environmental impact reports.
To overcome those weaknesses, Environmental Management Accounting (EMA) can provide data transition from financial accounting, cost accounting, and material flow management to improve material efficiency, reduce environmental impacts and reduce environmental costs. Objective; this study is to examine and evaluate the effect of stakeholder pressure, organizational size, top management commitment, and environmental uncertainty and focus on EMA application as a mediation variable on environmental performance. The sampling method uses Stratified Random Sampling on the one (1) to five (5) star hotels in Bogor City with a total of 52 samples. The data analysis technique used is Partial Least Squares Structural Equation Modeling (PLS-SEM) using the Smart PLS application. Research result; the hypothesis testing proves that stakeholder pressure, organizational size, top management commitment, and EMA implementation affect environmental performance. Then the EMA implementation as a mediation variable can influence the relationship between stakeholder pressure, organizational size, and top management commitment to environmental performance. In addition, environmental uncertainty does not affect environmental performance, and the application of EMA cannot mediate the relationship between environmental uncertainty and environmental performance. Limitations; the research carried out during the Covid-19 pandemic resulted in the limited distribution of questionnaires and was sometimes obstructed by the implementation of Large-Scale Social Restrictions (LSSR).
Keywords
stakeholder pressure;
organizational size; top management commitment;
environmental uncertainty;
implementation of
Environmental Management Accounting; environmental performance.
Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Volume 5, No 4, November 2022, Page: 30791-30807 e-ISSN: 2615-3076 (Online), p-ISSN: 2615-1715 (Print)
www.bircu-journal.com/index.php/birci email: [email protected]
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responding and relieving stakeholders’ pressure and improving environmental performance (Tarmizi & Soedarsa, 2016).
EMA is a combined approach that provides data transition from financial accounting, cost accounting, and material flow management to improve material efficiency and reduce environmental impacts, risks, and costs (Miswaty et al., 2020). EMA emphasizes the efficiency of environmental management by assessing environmental activities from the perspective of environmental costs and economic benefits (Lanita & Rachmawati 2020). It allows management to better monitor and evaluates management accounting and financial information in making several decisions (Surotenojo et al., 2019). The benefits of implementing EMA include; reducing the negative influence of company activities (Miswaty et al. 2020), assisting decision making (Amir et al. 2020), cost savings, and maintaining competitive advantage (Ong et al. 2020). Then it also for Eco-efficiency, compliance, and Strategic Position (Prawira & Herlina, 2018), improve corporate image and relationships with all stakeholders (Rasit et al., 2020), and improves environmental performance (Lanita & Rachmawati, 2020). Despite the enormous benefits of Environmental Management Accounting, its implementation is still in many developing countries (Ong et al. 2020).
The discussion about the theory of AML application is still not broad, but a number of research supports the idea that the application of AML is not only motivated by economics but also for reasons of legitimacy (Prawira & Herlina, 2018). Legitimacy is a view of company activities based on a system of values and social norms (Setiawan, 2016), based on the theory of legitimacy, companies will voluntarily report on activities that are expected by the community and disclose better quality environmental performance to legitimize their operations and to reduce complaints from stakeholders (Amir et al. 2020;
Lulu, 2020; Lindawati and Puspita, 2015). Stakeholder pressure is one of the factors driving environmental awareness (Krisdayanti et al. 2020). Companies are urged to practice responsibility for the impact of their business activities on society (Alfaiz & Aryati, 2019).
According to stakeholder theory, the company is actually a legal entity that not only seeks profit in its activities, but also must be useful for stakeholders (Ashari et al. 2020).
Environmental problems are often associated with the mining and manufacturing industries because they are considered the industries that have the most impact and are responsible for environmental damage (Krisdayanti et al., 2020). Besides, the hospitality industry also contributes to environmental damage, and environmental management issues in the hospitality industry are very important to be applied as a basic environmental management process (Isrossociawan et al. 2020). This research is a development of the research of Krisdayanti et al. (2020). This research uses the same independent variables as stakeholder pressure and organizational size. However, the researcher eliminates the Tri Hita Karana Cultural Variable because it is not relevant to the culture of the research site.
The dependent variable or hotel performance, the author, replaced by environmental performance and replaced the intervening variable into the application of environmental management to be more focused on environmental management accounting and its update by adding independent variables such as top management commitment based on Miswaty et al. (2020) and environmental uncertainty variables based on Darvishmotevali et al.
(2020) and another difference lies in the time and the location of this research.
There is a limited literature that has not been examined including the determinants of environmental performance in the hospitality industry that combines several factors, such as environmental management accounting, stakeholder pressure, organizational size, top management support, and environmental uncertainty. Then it is still very little research on the Indonesian hospitality industry. The prior research (Burhany, 2013; Latan et al., 2018;
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Appiah et al., 2020; Amir et al., 2020; Ong et al., 2020; Rasit et al., 2020; Lanita et al., 2020) examines the application of EMA to environmental performance, but that research focuses on the manufacturing industry. This study incorporates several aspects of multidimensional environmental performance developed by Ilinitch et al. (1998) which integrates elements from the Wood (1991) and Lober (1996) models, namely Organizational Systems, Regulatory Compliance, Environmental Impacts, and Stakeholder Relations, and adopting an instrument with twelve (12) indicator items by combining the instruments used by Elshaer et al (2021); Jamil & Johari (2020); Latan et al. (2018) and Loannidis et al (2021) by making some adjustments to get measurements that are more precise and relevant to the hospitality industry.
II. Review of Literature
2.1 Stakeholder Pressure and Environmental Performance
The pressure comes from various groups urging companies to take responsibility for the operational impact of their business on the community. The companies are encouraged to take responsibility for fulfilling the interests of shareholders and stakeholders. These stakeholder pressures demand more accountable reports on better environmental performance (Alfaiz & Aryati, 2019). Pramono (2016) mentions three pressure issues that can force hotels to pay attention to environmental management, namely (1) pressure from customers or tourists, (2) travel agents, and (3) climate change issues. Abdullah et al.
(2015) examined stakeholder pressure from government regulations, community groups, and environmental organizations. Then the hypothesis which is proposed is:
H1 : Stakeholder pressure affects environmental performance 2.2 Organizational Size and Environmental Performance
Organizational size is a scale that can classify the size of a company in various ways (Dewi & Yasa, 2017). Organizational size is a proxy for environmental information disclosure, where the availability of environmental information is associated with a larger organizational size (Septiana et al., 2018). The organizations’ higher resources, funding, and workforce can reduce the environmental impact and lead to a better accounting system (Ashari et al., 2020). The company responds to pressure from various stakeholders to expose environmental costs as pollution prevention measures and environmental conservation activities (Deegan et al. 1996). The company also gets greater pressure from the social and economic environment, environmental authorities, and various organizations to demand transparency of their environmental protection activities (Stolka & Fijorek (2020). Indeed, the hypothesis proposed in this study are:
H2 : Organizational size affects environmental performance.
2.3 Top Management Commitment and Environmental Performance
Top management commitment can be interpreted as direct participation by top management of the organization that affects the performance of the natural environment with company processes, products, and policies, such as reducing waste and energy consumption and adopting environmental management accounting (Amir et al. 2020).
Achieving good environmental performance requires a commitment from top management;
without a commitment from top management, fulfilling responsibilities and awareness of the company’s environment will be challenging (Kurniawan & Breliastiti, 2017). So, the proposed hypothesis in this study is:
H3 : Top management commitment effect on environmental performance.
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2.4 Environmental Uncertainty and Environmental Performance
Environmental uncertainty is an unpredictable situation (such as climate change or natural disasters) or the rate of change in a market (such as customer desires, competitor, and technological challenges) that lead companies to respond to current or future conditions (Latan et al. 2018). The high environmental uncertainty will impact decision- making, control, and planning complexity. It is due to the difficulty of predicting future events (Adnantara, 2020). Therefore, the company management must respond swiftly to the uncertainty of the external environment to create appropriate and effective decision- making (Eriani & Fanani, 2019). Sustainable mitigation of environmental uncertainty through sharing appropriate information can lead organizations to improve their environmental performance (Latan et al., 2018). Indeed, the hypothesis proposed in this study are:
H4 : Environmental uncertainty affects environmental performance.
2.5 The Application of Environmental Management Accounting (EMA) and Environmental Performance
The definition of environmental management accounting (EMA), according to IFAC and UNDSD, is performance management that implements accurate accounting systems and practices. It includes environmental information (physical and monetary) to assist in decision-making (Tarmizi & Soedarsa, 2016). EMA is a combined approach that provides data transition from financial accounting, cost accounting, and material flow management to improve material efficiency and reduce environmental impacts, risks, and costs (Miswaty et al., 2020). The application of EMA is a major factor in environmental performance. The practice of EMA can empower organizations to achieve competitive advantage and improve their performance (Rasit et al., 2020). Then the hypothesis proposed in this study are:
H5: The application of Environmental Management Accounting effect on environmental performance.
2.6 Stakeholder Pressure, EMA Implementation, and Environmental Performance Stakeholder pressure on business actors to pay more attention and care for the environment can encourage business actors to implement environmental management practices. Further, it maintains the relationship between companies, stakeholders, and corporate sustainability (Krisdayanti et al., 2020). The application of EMA is one of the environmental strategies that can reduce environmental costs and the impact of damaging the environment due to company operations (Surotenojo et al., 2019). It also can help the managers define, identify and allocate environmental costs accurately (Paru, 2018). EMA’s application can improve environmental performance (Appiah et al., 2020). The EMA application can empower organizations to achieve competitive advantage and improve their performance to provide stakeholders with long-term growth and financial security (Rasit et al., 2020). It can trigger a significant influence. Then the hypothesis proposed in this study are:
H6 : The application of environmental management accounting can mediate the effect of stakeholders’ pressure on environmental performance
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III. Research Method
The data type in this study is primary data in the form of a questionnaire. The population used in this study were all one-star hotels (1) to five (5) located in Bogor City.
The hotel criteria include the registered and recorded hotel at the Bogor City Tourism Office in 2019 total of fifty-two (52) hotels. The sample selection uses Stratified Random Sampling by classifying a population into sub-populations based on specific characteristics (star classification). Then the sample is selected using a random sampling method based on the start, and the sample selection is made proportionally (Indriantoro & Supomo. 1999, p.125).
Table 1. Sample size based on Star Level
(Data from the Bogor City Tourism Office in 2019) Level
Based on the Star Total Elements Proportional (100% of total elements)
1 star 8 8
2 star 11 11
3 stars 17 17
4 stars 16 16
Total 52 52
Moreover, the data analysis in this study uses Partial Least Squares Structural Equation Modeling (PLS-SEM). It is used because it can be implemented with small sample size, even though the model is very complex. Even PLS-SEM must have population characteristics so that the small sample size can still be accepted (Cahyadi et al., 2020). The analysis software used is SmartPLS which is one of the leading software applications for Structural Partial Least Squares. Firohmatillah & Arisena (2020); Irwan &
Adam (2015) explain seven (7) steps in the analysis of the Partial Least Square (PLS) equation, namely (1) designing a structural model (inner model), (2) designing a measurement model (outer model), (3) Constructing a Path Diagram, (4) Conversing of Path Diagram to Equation System, (5) Estimation Coefficient, Loading, Path, and Weight, (6) Evaluation of Goodness-of-Fit, (7) Hypothesis Testing (Resampling Bootstrapping).
IV. Result and Discussion
4.1 Testing the Measurement Model (Outer Model) a. Validity test
Table 2. Validity Test Results
Source: processed data, 2022
Variabel Loading
Factor
Average Variance Extracted (AVE)
Stakeholder pressure 0,939 0,890
Organization size 0,986 0,986
Top management commitment 0,941 0,810
Environmental uncertainty 0,865 0,511
Environmental performance 0,986 0,869
Application of environmental management
accounting 0,948 0,766
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Table 3 shows that the results of the convergent validity test and discriminant validity test in this study. Convergent validity test results using the loading factor value.
Based on the test results, it can be seen that the loading factor value > 0.7. Thus, the results of the convergent validity test indicate that the proxy used by the researcher can explain the research variables. While the discriminant validity test is to compare the value of the Average Variance Extracted (AVE) with the discriminant variable. The indicator is said to be valid if AVE ≥ 0.5. The AVE value is used to measure the number of variances that can be captured by the construct compared to the variance caused by measurement errors. The test results can be seen that the AVE value for each variable has met the requirements ≥ 0.5, this value shows a good measure of convergent validity. That is, latent variables can explain the average of more than half the variance of the indicators.
b. Reliability Test
Table 3. Reliability Test Results
Source: processed data, 2022
The reliability test with Cronbach’s alpha aims to test the consistency of the answers in the questionnaire. The variability size is good if the Cronbach alpha value is > 0.7.
Based on table 4, it can be concluded that all constructs meet the reliable criteria. The Cronbach’s Alpha value is above 0.7 as the recommended criteria. The value of composite reliability shows internal consistency, namely a high value of composite reliability indicates the consistency value of each indicator in measuring the construct. Composite Reliability test results in Table 4 can be concluded that all constructs meet the reliable criteria, or it results in a value above 0.7 as the recommended criteria.
4.2 Structural Model Testing (Inner Model) a. R-square test
Structural model testing (inner model) measures the relationship between research variables. The evaluation of this model uses R2 as the construct or dependent variable; the path coefficient value or t-value of each path is used to test the effect of the independent variable on the dependent variable.
The PLS model’s assessment process begins by defining the R-square for each latent dependent variable. It can be seen in Table 6 that the total of the number R Square is 0.917 or 91%. This value infers the influence of the Stakeholder Pressure (X1), Organizational Size (X2), and Top Management Commitment (X3) variable, which is mediated by the Environmental Management Accounting Application (Z). It also influences the Environmental Performance variable (Y) by 91%. The model in this study includes a strong evaluation model (0.917 > 0.670).
Variabel Cronbach Alpha Composite
Reliability
Stakeholder pressure 0,939 0,961
Organization size 0,986 0,993
Top management commitment 0,941 0,955
Environmental uncertainty 0,865 0,858
Environmental performance 0,986 0,988
Application of environmental
management accounting 0,948 0,958
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Variable R Square
Environmental Performance 0.917 Source: processed data, 2022
b. Significance Test
The evaluation of the PLS-SEM structural model also considers the significant value as a parameter that determines the effect of exogenous variables on endogenous variables through the bootstrapping method. The value that is considered significant if the t-statistic value is used at a significance level of 10%, then the t-statistic value is > 1.65 (Ghazali &
Lata, 2020, p. 81)
c. Structural Model Testing (Inner Model)
Hypothesis testing uses a t-test, comparing the values of t-table and t-statistics. The hypothesis is accepted if the t-statistic value is greater than the t-table value (t-statistic
>1.65). The hypothesis is rejected if the t-statistic value is smaller than the t-table value (t- statistic <1.65). This study uses the rules of Preacher & Hayes (2008) to estimate the main and mediating effects. The following are the results of testing the main effects and mediating effects.
d. Hypothesis testing 1. Main Effect
Table 5. Main Effects Test of Structural Model Results
Variable Original
Sample (O)
Sample Mean
(M)
T Statistics
P Values
Decision
Stakeholder Pressure ->
Environmental Performance
0.827 0.828 12,809 0.000
accepted Organizational size ->
Environmental Performance
0.900 0.901 28,139 0.000 accepted Top Management
Commitment ->
Environmental Performance
0.902 0.903 36,494 0.000 accepted
Environmental uncertainty ->
Environmental Performance
-0.265 -0.158 0.762 0.446 not accepted EMA Implementation ->
Environmental Performance
0.907 0.911 22.875 0.000 accepted Source: processed data, 2022
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1) The main effects test examine the effect of stakeholder pressure on environmental performance
Researchers propose H1 is stakeholder pressure. It affects environmental performance. The test results in table 7 and figure 2 show that the influence of stakeholder pressure on environmental performance has a t-statistic value of 12.809 > 1.65, and the significance is 0.000 < 0.05. Thus, stakeholder pressure affects environmental performance. So H1 is accepted, with the following results:
Figure 1. Structural Model Test Results of Stakeholder Pressure Variables (Main Effects) Stakeholder pressure originates from government regulations forcing companies to comply and be disciplined in managing the environment. The routine supervision carried out by local governments on environmental regulations can encourage management to improve environmental performance. Environmental organizations’ pressure is considered one of the determinants of social control that continues to control hotel activities and direct public opinion towards the hotel’s image. It also encourages management to control and prevent environmental pollution. (Basuki &Patriots, 2011). The high customer interest in eco-friendly hotels encourages management to improve eco-friendly hotel practices (Pramono, 2016). This result is consistent with Mensah’s (2014) and Maksoud et al. (2016) research.
2) The main effect test is to examine the effect of organizational size on environmental performance.
Researchers propose that H2 is the organization’s size that affects environmental performance. The test results in Table 7 and Figure 3 show that the influence of organizational size on environmental performance has a t-statistic value of 28.139 > 1.65, and the significance is 0.000 < 0.05. Thus, the organization’s size affects environmental performance, so H2 is accepted.
Figure 2. Structural Model Test Results of Stakeholder Pressure Variables (Main Effects) Big-size hotels have a bold impact over small ones because they use more resources and energy and produce a lot of waste (Pramono, 2016). There is even greater pressure from the public to expose environmental performance as a pollution prevention measure and environmental conservation activity (Deegan et al. 1996). Large organizations are more sensitive to their reputation (Mensah, 2014). Then large or big-sized hotels will adopt more proactive environmental strategies than small hotels (Medina, 2015). The larger the
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organization’s size, the higher the company’s influence on the community. The environmental performance will also have more impact on the community (Krisdayanti et al., 2020). These results are consistent with the findings of a study conducted by (Mensah
& Blankson. 2013; Maksoud et al. 2016).
3) Main effects test to examine the effect of top management commitment on environmental performance
Researchers propose that H3 is the commitment of top management to affect environmental performance. The test results in table 7 and figure 4 show that the effect of top management commitment on environmental performance has a t-statistic value of 36,494 > 1.65, and the significance is 0.000 < 0.05. Thus, top management commitment affects environmental performance, So H3 is accepted, with the following results:
Figure 3. Testing results of the Structural Model of Top Management Commitment Variable (Main Effect)
Top management prioritizes environmental quality and performance by providing direction to individuals, encouraging them to develop environmental management information systems, and taking full responsibility for improving the quality of environmental performance (Kurniawan & Breliastiti, 2017). Top management involves company resources that include integrated planning of environmental issues to improve environmental performance (Appiah et al. 2020). These results are supported by the findings of research conducted by (Spencer et al. 2013; Kurniawan & Breliastiti. 2017;
Latan et al., 2018; Appiah et al., 2020; Amir et al., 2020)
4) The main effect test examines the effect of environmental uncertainty on environmental performance.
Researchers propose that H4 is environmental uncertainty that affects environmental performance. The test results in Table 7 and Figure 5 show that the effect of environmental uncertainty on environmental performance has a t-statistic value of 0.762 < 1.65, and the significance is 0.446 > 0.05. Thus, environmental uncertainty does not affect environmental performance, so H4 is not accepted, with the following results:
Figure 4. Results of Structural Model Testing for Environmental Uncertainty Variables (Main Effects)
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There are three indicators in the questionnaire. The first is environmental uncertainty about skilled employees, even though management has information about the trained employees regarding the environment. It has not been included in the employee planning strategy with various considerations, such as being constrained by increasing salaries/wages. Second, market uncertainty regarding customer interest in eco-friendly hotels. The magnitude of customer interest in eco-friendly hotels fluctuates from time to time. So management does not include “green competition” as an eco-friendly hotel variable in their market strategy. There are still few hotels that take “Green Hotel” as their competitive advantage. Third, the uncertainty of green technology, management recognizes the need to install green technology to eliminate waste and pollution production. However, green technology requires high costs, so management does not want to invest in green technology. So that these three factors do not affect environmental performance. This result is supported by the findings of Pondeville et al. (2013)
5) The main effect test examines the effect of implementing environmental management accounting on environmental performance.
The researchers propose that H5 is the application of environmental management accounting. It affects environmental performance. The test results show that the effect of environmental management accounting application on environmental performance has a t- statistic value of 22.875 > 1.65, and the significance is 0.000 < 0.05. Thus, the application of environmental management accounting affects environmental performance. Indeed, H5
is accepted, with the following results:
Figure 5. Structural Model Test Results of EMA Implementation Variables (Main Effects) The implementation concept of EMA is carried out by allocating environmental costs for environmental management, conducting Environmental Impact Management Assessment, recording the amount of clean consumed water, recording the amount of water discharged, recording the amount of energy consumed, recording the amount of energy saved, and recording the amount waste generated. Then, Latan et al. (2018) describe how EMA’s information can help managers develop indicators for measuring their environmental performance. Then, using EMA as a solution assists managers in making the right decisions. This result is supported by findings (Latan et al. 2018; Amir et al.
2020),
2. Mediation Effect
Table 6. The Structural Model of Mediation Effect Test Result
Variable Original
Sample (O)
Sample Mean (M)
T Statistics
P Values Decision Stakeholder Pressure ->
EMA Implementation ->
Environmental Performance
0.682 0.691 7,748 0.000 accepted
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1) Test the mediating effect of the stakeholder pressure variable. It is used to test the effect of stakeholder pressure on environmental performance with the application of environmental management accounting as a mediating variable
Researchers propose that H6 is the application of environmental management accounting that can mediate the influence of stakeholder pressure on environmental performance. The test results in table 8 and figure 7 show that the mediating effect of environmental management accounting application on the relationship between stakeholder pressure and environmental performance has a t-statistic value of 7.748 > 1.65, and the significance is 0.000 < 0.05. Thus, environmental management accounting can mediate the effect of stakeholder pressure on environmental performance. So, H6 is accepted, with the following results:
Figure 6. X1 Variable Structural Model Testing Results (Mediation Effect)
Implementing EMA aims to meet stakeholder expectations for better environmental performance. So, it can create customer satisfaction, relationships with the community and government, and regulatory compliance (Gunawan & Sugeng. 2017). The mediating role of environmental management accounting is a fundamental mediating variable that is very important for improving organizational performance in the environment that can have a significant influence. The application of Environmental Management Accounting triggers organizations to achieve a competitive advantage in improving their performance (Appiah;
2020, Latan; 2018. and Amir 2020). These results are consistent with research conducted by (Maksoud et al. 2016; and Krisdayanti et al. 2020).
Organizational size ->
EMA Implementation ->
Environmental Performance
0.733 0.747 8.173 0.000 accepted Top Management
Commitment -> EMA Implementation ->
Environmental Performance
0.755 0.757 10,675 0.000 accepted Environmental uncertainty
-> EMA Implementation -
> Environmental Performance
-0.212 -0.173 0.707 0.480 Not accepted
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2) The mediating effect of the Organizational Size variable test. It is used to examine the effect of organizational size on environmental performance with the application of environmental management accounting as a mediating variable.
Researchers propose that H7 is the application of environmental management accounting that mediates the influence of stakeholder pressure on environmental performance. The test results in table 8 show that the mediating effect of environmental management accounting on the relationship between organizational size and environmental performance has a t-statistic value of 8.173> 1.65, and the significance is 0.000 < 0.05.
Thus, environmental management accounting can mediate the effect of organizational size on environmental performance. So H7 is accepted.
Figure 7. The Results of Structural Model Testing for Organizational Size Variables (Mediation Effect)
The relationship between organizational size and environmental management is that the larger the organization’s size, the higher the company’s influence on the community.
Then, the company will try to implement better environmental management, and the impact of environmental performance will be more impacted on the community (Krisdayanti et al., 2020). Large organizations will be more severe in compelling accounting systems to increase the transparent level of environmental information than small organizations (Septiana et al. 2018). So, environmental management accounting can mediate the relationship between organizational size and environmental performance. This result is supported by (Krisdayanti et al. 2020; and Ashari et al. 2020).
3) The mediating effect of the Top Management Commitment variable test to examine the effect of top management commitment on environmental performance with the application of environmental management accounting as a mediating variable.
Researchers propose that H8, which is the application of environmental management accounting, mediates the effect of top management commitment on environmental performance. The test results in Table 8 and Figure 9 show that the mediating effect of environmental management accounting on the relationship between top management commitment and environmental performance has a t-statistic value of 10.675> 1.65, and the significance is 0.000 < 0.05. Thus, applying environmental management accounting can mediate the effect of top management commitment on environmental performance. So, H8 is accepted, with the following results;
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Figure 8. Variable Structural Model Test Results Top Management Commitment (Mediation Effect)
Top management’s commitment to environmental preservation will implement procedures that can provide information related cost accounting and material flow. The role of EMA is helpful for managers to produce such information and ease the managers to develop indicators to check their environmental performance Amir et al. (2020). This result is supported by (Latan et al. 2018; Amir et al., 2020; Appiah et al. 2020; Miswaty et al., 2020).
4) The mediating effect test of environmental uncertainty is used to test the effect of environmental uncertainty on environmental performance with the application of environmental management accounting as a mediating variable.
Researchers propose H9, which is the application of environmental management accounting that can mediate environmental uncertainty’s effect on environmental performance. The test results in table 8 and figure 10 show that the mediating effect of environmental management accounting application on the relationship between environmental uncertainty and environmental performance has a t-statistic value of 0.707 <
1.65, and the significance is 0.480> 0.05. Thus, environmental management accounting cannot mediate the effect of environmental uncertainty on environmental performance. So H9 is not supported, with the following results;
Figure 9. The Results of Structural Model Testing for Environmental Uncertainty Variables (Mediation Effect)
Management does not respond to environmental uncertainty, such as environmentally trained employees, market uncertainty regarding customer interests in green hotels, and the uncertainty of green technology as a factor that can affect environmental performance. The environment is predictable, so management does not need
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the information generated from the application of EMA to predict the uncertainty. So, the benefits of implementing EMA cannot mediate the relationship between environmental uncertainty and environmental performance. This result is also supported by the findingRunlei et al. (2020) and Pondeville et al. (2013).
V. Conclusion
This study aims to determine the effect of stakeholder pressure, organizational size, top management commitment, and environmental uncertainty on environmental performance in five-star hotels in the Bogor City Region. Then based on the results of calculations and hypothesis testing in the previous chapter, the following conclusions can be obtained:
1. Stakeholder pressure affects Environmental Performance. Thus, H1 is accepted.
2. Organizational size affects Environmental Performance. Thus, H2 is accepted.
3. Top Management Commitment affects Environmental Performance. Thus, H3 is accepted.
4. Environmental uncertainty does not affect performance. Thus, H4 is not accepted.
5. The application of Environmental Management Accounting affects environmental performance. Thus, H5 is accepted.
6. Applying environmental management accounting can mediate the effect of stakeholder pressure on environmental performance. Thus, H6 is accepted.
7. Applying environmental management accounting can mediate the effect of Organizational Size on Environmental Performance. Thus, H7 is accepted.
8. Applying environmental management accounting can mediate the effect of Top Management Commitment on Environmental Performance. Thus, H8 is accepted.
9. Environmental management accounting cannot mediate the effect of Environmental Uncertainty on Environmental Performance. Thus, H9 is not accepted.
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