The Impact of Strategic Management Accounting on Environmental Sustainability: A Study in Malaysian Construction Industry

The construction sector in Malaysia plays a crucial role in contributing to the country’s development. Despite its significant contribution, the construction industry in Malaysia is struggling with challenges related to carbon dioxide emissions and sustainability. Consequently, this research investigates the issue of environmental sustainability within the Malaysian construction industry. It also assesses the influence of strategic management accounting (SMA) methods, such as kaizen costing, life cycle costing (LCC), and environmental management accounting (EMA) on the environmental sustainability of the Malaysian construction industry. To conduct this study, a questionnaire survey was administered to firms listed by Construction Industry Development Board (CIDB), specifically targeting G7 construction firms. A quantitative approach was employed, utilizing Partial Least Squares Structural Equation Modelling (PLS-SEM) to validate the proposed hypotheses. The findings of the study indicate that the adoption of both kaizen costing and LCC have significant impacts on the environmental sustainability practices in the Malaysian construction industry. However, the study reveals EMA has an insignificant impact on environmental sustainability practices. As the world collaboratively strives towards achieving Sustainable Development Goals (SDGs) by 2030, this study primarily contributes by illuminating Malaysia’s progress towards these goals, particularly in the context of SDG12, Target 12.5 which emphasizes sustainable waste management and a substantial reduction in waste generation.