Kế toán quản trị môi trường tại các doanh nghiệp sản xuất điện ở Việt Nam

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MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

The study was completed at: Foreign Trade University, No 91 Chua Lang street, Dong Da, Ha Noi

Science instructor: Assoc Prof Dr Dao Thi Thu Giang

At hours date month year

The disseration can be found at the library: The National Library and The Foreign Trade University’s library

INTRODUCTION

1 The Rationale of the study

In recent years, environmental issues have become a pressing global concern Under the pressure from customers, investors, and other stakeholders, businesses have started recognizing their deep responsibility regarding environmental concerns One way to assess these issues is through examining the information provided by environmental accounting

Worldwide studies indicate that alongside legal regulations, the implementation of Environmental Management Accounting (EMA) heavily relies on the roles and perceptions of corporate management in relation to other functional departments Different industries hold varying perspectives and perceptions regarding pressures and influencing factors Therefore, researching, evaluating, and validating the impact of these factors on the application of EMA from the standpoint of business management is crucial

For the Vietnamese electricity industry, power generation costs constitute nearly 80% of the cost structure, primarily fuel costs (thermal coal, gas) (Ministry of Industry and Trade's electronic portal, 2023) Implementing EMA tools aids in controlling input fuel costs and optimizing general and environmental costs allocated to pricing This enhances the competitive advantage of enterprises amid the government's strategy targeting the competitive electricity market Research outcomes

on EMA tools applied in electricity enterprises will serve as reference materials, contributing experiences to other sectors in the economy Originating from the significance of EMA, the author chose to study the topic "Environmental Management Accounting in Electricity Production Enterprises in Vietnam" for the doctoral dissertation The aim

is to understand the current application status, factors influencing EMA application, and to test factors affecting EMA application in electricity production enterprises Based on this, solutions will be proposed for electricity production enterprises in Vietnam specifically and theoretical and practical research implications for related industries

2 Research Objectives

General Objective: clarifying influencing factors, thereby proposing solutions to enhance EMA application in Vietnamese power enterprises Specific Objectives:

Synthesize theoretical foundations of EMA in enterprises, elucidating its content and role in corporate management

Evaluate the current status of EMA application in Vietnamese electricity production enterprises, studying typical cases in one electricity production enterprise to clarify the role of EMA application in business management

Identify factors influencing EMA application and validate the degree

of impact of these factors on application in Vietnamese electricity production enterprises

Propose solutions to enhance EMA application in Vietnamese electricity production enterprises

3 Research Subjects and Scope

Research Subjects: EMA in electricity production enterprises

Research Scope:

Spatial Scope: Research covers electricity production enterprises in Vietnam, specifically focusing on a typical study of the Thai Binh Thermal Power Company due to thermal power being the main source of electricity generation in Vietnam and its significant environmental impact and associated costs compared to other power generation sectors Time Scope: Data collection on the electricity industry was conducted from 2014 to 2022, and the assessment of the current EMA application in electricity enterprises was surveyed over 3 years from 2021 to 2023 Content: The current application status and factors influencing EMA application in electricity production enterprises

5 Thesis Structure:

Apart from the introduction and conclusion, the thesis comprises 5 chapters:

Chapter 1: Overview of research on EMA in enterprises

Chapter 2: Theoretical foundations of EMA in enterprises

Chapter 3: Research methodology

Chapter 4: Research results and discussion

Chapter 5: Solutions to enhance EMA application in power enterprises

6 New Contributions and Limitations of the Thesis:

New Contributions: The thesis has contributed academically and

theoretically in several aspects:

It synthesized theoretical frameworks of EMA: its contents and accounting methods used in EMA

It studied the theoretical basis of factors influencing EMA application

in enterprises based on legal theory, innovation theory, randomness theory, and institutional theory Additionally, the thesis constructed a model studying factors influencing EMA application in Vietnamese power production enterprises

It understood and analyzed a typical case of EMA application at the Thai Binh Thermal Power Plant to clarify EMA's role in cost control and business decision-making

It demonstrated positively impactful factors on EMA application in Vietnamese power production enterprises, specifically internal factors such as high-level management's awareness and the company's environmental strategy, as well as external factors including institutional pressures: coercive, normative, and mimetic pressures

Based on the results of factors affecting EMA application, the author proposed two solution groups for enterprises and recommendations for stakeholders to enhance EMA application in Vietnamese power production enterprises

Thesis Limitations:

The research examined only 5 factors affecting EMA, and the new research model explained only 63.7% of the variation in the dependent variable, leaving 36.3% unexplained

The research focused solely on EMA in the electricity industry Therefore, it needs reevaluation in other industries, as different sectors might present significant differences

With 209 valid survey responses, the study met the minimum requirements for quantitative research, but it remains relatively small compared to the population The research results might be applicable to this sample but limited when extrapolated to the entire population

Future Research Directions:

Based on the limitations, the author identified future research directions:

Identify additional factors influencing EMA in Vietnamese power enterprises through comprehensive studies, gathering opinions from other experts, and altering sampling scope and size

Expand the research scope on EMA in different industries in Vietnam

or broaden the research scope on corporate social responsibility accounting in Vietnamese power enterprises

Expand research on the impact of EMA on business efficiency in the future

CHAPTER 1: OVERVIEW OF RESEARCH ON

ENVIRONMENTAL MANAGEMENT ACCOUNTING IN

ENTERPRISES 1.1 Theoretical studies on the content of EMA applied in

enterprises

The content of EMA has been extensively discussed in guidelines provided by various organizational associations and in studies by different authors within and outside the country These studies can be categorized into the following main research directions:

Reasearch on EMA information

Studies encompass proposals for comprehensive theoretical frameworks regarding monetary and material information that an EMA system can provide to senior managers (Burritt et al., 2002) Additionally, guidance documents on the identification and classification of environmental costs from international organizations like the UN Department of Sustainable Development (UNDSD), International Federation of Accountants (IFAC), the Association of Chartered Certified Accountants (ACCA), as well as specific regulations from governments in countries like Japan and Australia

Research on Tools and Methods of Environmental Cost Accounting Applied in Enterprises

Apart from the aforementioned guidelines, studies before 2010 mostly focused on describing and evaluating the application status of EMA tools

in enterprises This included applications in developed European countries, presented in the report "Introducing Environmental Management Accounting at enterprise level," summarizing results from the application of EMA in five pioneering European countries within UNIDO's project Additionally, studies examined models of EMA application in universities in Australia (Huei-Chun Chang, 2007) The application of these tools expanded to developing countries such as Honduras (Christine Jasch, Daniel Ayres, Ludovic Bernaudat, 2010), Malaysia (Che Zuriana Muhammad Jamil et al., 2014) focusing on small and medium-sized enterprises

1.2 Studies on Factors Influencing the Application of

Environmental Management Accounting

1.2.1 Institutional Pressure Factor

Institutional pressure comprises coercive, normative, and mimetic pressures (DiMaggio and Powell, 1983) Research conducted by Jalaludin (2011) on the relationship between institutional pressure and the application of EMA in manufacturing companies indicated several influences of institutional pressure on EMA application Various studies

in different industries and countries by Jamil, Mohamed, Muhammad, Ali (2015) in Malaysia, Iredele and Ogunleye (2018) in Nigeria and South Africa, Chang (2007), Latan et al (2018), and Avylin et al (2020) confirmed institutional pressure as one of the influencing factors on EMA

1.2.2 Top Management's Awareness Factor

Latan et al.'s study (2018) surveyed 107 ISO14001-certified companies listed on the Indonesian Stock Exchange and showed empirical evidence of the significant positive influence of organizational resources (environmental strategy, commitment of top leadership, and environmental uncertainty) on EMA application, which could enhance environmental performance Studies in Malaysia by Avylin Roziana and Mohd Ariffin (2020), in Thailand by Setthasakko (2010), and in various industries in Vietnam by Nguyen Thi Nga (2017), Nguyen Thanh Tai (2020) also identified top management's awareness as an influencing factor on the degree of management accounting application in enterprises

1.2.3 Enterprise Environmental Strategy Factor

Empirical research results indicate that environmental strategies prompt companies to implement an environmental management system, aligning with appropriate environmental accounting Guenther et al (2016) argued that both environmental accounting and environmental management systems aim to align corporate goals with achieving the company's environmental performance According to Rodrigue (2013), a company's environmental strategies can improve its environmental performance outcomes when using environmental performance indicators

1.2.4 Awareness of Business Environment Dynamics Factor

In highly uncertain situations, complex environmental accounting information helps managers improve decision-making quality and mitigate negative impacts on environmental performance Previous studies, such as Lewis, Harvey (2001), showed that external environmental uncertainty significantly influences an organization's accounting practices Moreover, awareness of business environment dynamics has been identified as an encouraging factor for environmental accounting application (Soleimani, Majbouri, 2019), leading to a company's environmental performance outcomes (Latan et al., 2018) The study by Yusheng Kong et al (2022) also supported this notion

1.2.5 Other Factors

Apart from the main factors mentioned above, due to varying characteristics across different industries and economic-political contexts, studies have discovered new factors like internal communication, the role of management accounting departments, or the scale and financial status of enterprises

1.3 Research Gaps and Directions

Firstly, previous studies have been conducted in different countries and industries, yet there has been no study surveying electricity production enterprises in Vietnam

Secondly, studies in Vietnam have only approached the financial environmental accounting or environmental cost management perspectives, neglecting to consider environmental revenue Thus, comprehensive research is needed on both material and monetary aspects

of EMA

Thirdly, studies focusing on the same independent factor conducted in different contexts or using different research methods and data processing

might yield inconsistent results

Chapter 2: Theoretical Foundations of Environmental Management

Accounting in Enterprises 2.2 Concept of Environmental Management Accounting

2.2.1 Viewpoint of EMA

To meet the research objectives, in this thesis, Environmental Management Accounting (EMA) is understood as "a system of accounting methods that provide financial and material information related to the environment as a basis for decision-making within the internal operations of the enterprise."

2.2.2 Important role of EMA

Environmental Management Accounting (EMA) is an effective tool that supports businesses in general, and specifically electrical enterprises, particularly in an environment where there are increasingly new regulations and sanctions related to environmental protection, requiring businesses to allocate more resources for compliance The role of EMA manifests in the following aspects:

Decision Support Measurement and enhancement of operational efficiency Cost control contributing to profit maximization

2.2 Foundational Theories related to EMA in enterprises

Various theories have been employed in studies on Environmental Management Accounting (EMA) worldwide and in Vietnam In this study, the author utilized the legitimacy theory to explain the motivation behind using EMA as a tool for organizations to fulfill their social responsibilities in achieving legitimate operations The theory of diffusion of innovations and contingency theory were used to elucidate the internal factors within enterprises affecting the application of EMA: high-level managerial perception, the environmental strategy of the enterprise, and awareness of business environmental dynamics Finally, institutional theory was employed to explain the three pressures from stakeholders driving businesses to have more impetus in implementing EMA: coercive pressure, normative pressure, and mimetic pressure

2.3 Content of Environmental Management Accounting

Table 2.1 Comprehensive Framework of Environmental

Management Accounting

Source: Schaltegger & Burritt, 2000

Environmental Management Accounting (EMA)

Monetary Environmental Management

9 Material and energy flow accounting (short term impacts on the environment – product, site, division and company levels

10 Environmental (or natural) capital impact accounting

Post investment assessment of individual projects

11 Ex post assessment of short term environmental impacts (eg of a site product)

12 Life cycle inventories Post investment assessment of physical

environmental investment appraisal

13 Physical environmental budgeting (flows and stocks) (eg

material and energy flow activity based budgeting)

14 Long term physical

environmental planning

15 Relevant environmental impacts (eg given short run constraints on activities)

16 Physical environmental investment appraisal Life cycle analysis

of specific project

2.4 Classifications of revenue and expenses in EMA

Table 2.2 Classifications of Environmental Revenue and Costs by

UNDSD (Source: Jasch C, 2008)

Waste treatment costs

Risk prevention and

Waste treatment costs

2.5 Accounting Methods Used in Environmental Management Accounting

In practice, Environmental Management Accounting (EMA) employs four methods to account for environmental costs, including Activity-Based Costing (ABC), Material Flow Cost Accounting (MFCA), Full Cost Accounting (FCA), and Life Cycle Costing (LCA) These methods have their own distinct advantages and disadvantages:

ABC aids in identifying the drivers of environmental costs and enables cost allocation accordingly

MFCA proves highly beneficial for organizations with a high proportion of material costs within total operating expenses

FCA advocates accounting for not only internal costs but also external costs

LCA examines environmental costs from the organization's production lifecycle and tracks impacts on the environment, necessitating consideration of suppliers and product processing

2.6 Experience of Applying EMA in Some Countries Worldwide

The number of practical situations involving Environmental Management Accounting (EMA) is increasing across various industries The developmental trend of EMA shows that while this method has garnered attention and interest, there is still a lack of practical situations

in some areas (Burritt, 2004) Therefore, efforts to promote EMA are concentrated on developing tools to identify or determine environmental costs and explaining the usage and application of EMA in organizations

To gain a better understanding of EMA, this section focuses on exploring the practical application experiences at two typical global enterprises to clarify the role of EMA in cost control and business decision-making: Canon Company in Japan and Nitrokémia Company in Hungary

From the deployment experiences of these two enterprises in EMA, several lessons can be drawn for Vietnamese businesses in general and power production enterprises in particular: (1) Enhancing managerial awareness of EMA, (2) Developing specific plans, (3) Establishing an environmental information system to support the EMA process, (4) Implementing integrated EMA alongside other methods and tools, (5) Identifying and considering the benefits and costs when applying EMA

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research design

Figure 3.1: Research process

Source: Compiled by author

3.2 Research Methods

Qualitative research methods

After synthesizing previous studies, the author identified 10 factors influencing environmental management accounting adoption in businesses as shown in summary table 3.1 below and preliminary scales

in the Proposed survey table

Table 3.1: Summary of factors influencing Environmental

management accounting

Source: Compiled by author

Factor group Factors influencing

environmental management accounting

Source

1 Group of factors

outside the

enterprise

Coercive pressure Jamil et al 2015,

Nguyen Thi Nga 2017, Latan et al 2018

Shanyong Wang et al 2018

Shanyong Wang et al 2018

4 Group of factors

within the

enterprise

Perceptions of senior managers

10 Business size and finances Chang 2007, Avylyn

2020, Nguyen Thanh Tai

2020

The author conducted qualitative research by interviewing eight experts, who are experienced and knowledgeable about accounting in electricity enterprises or who have researched environmental management accounting The discussion results help identify 4 groups of factors influencing environmental management accounting adoption at electricity enterprises in Vietnam with 26 observed variables to measure the factors and 13 observed variables to measure the application of environmental management accounting as the research model and Table 3.2 Summary of measurement scales below