Corporate ownership and the effectiveness of management accounting tools in enhancing ESG performance

Abstract

This research explores how management accounting instruments, Balanced Scorecard (BSC), Benchmarking, and Environmental Management Accounting (EMA), affect ESG performance in publicly-traded food firms in Asia between 2019 and 2023. With panel data of 51 companies, and fixed effects regression, the study concludes that BSC and EMA have a significant positive effect on ESG performance, which emphasizes their strategic importance in incorporating sustainability into corporate decision making. There is no notable impact of benchmarking, indicating that ESG alignment is not very great in practice. The negative correlation between profitability and ESG performance implies the potential short-term trade-offs in investments in sustainability. Moreover, the corporate ownership also has a positive moderating role in the connection between accounting tools and ESG results, indicating that the governance structure promotes the effectiveness of ESG. The results provide practical implications to companies that need to enhance sustainability performance and add to the body of knowledge in strategic accounting and integration of ESG.