How does environmental accounting information influence attention and investment?

Purpose - Environmental consequences increasingly influence management strategy and choice. The purpose of this paper is to investigate the effects on attention and investment of: incorporating environmental data into a balanced scorecard (BSC), called the sustainability balanced score card (SBSC) and the organization of environmental accounting information. Design/methodology/approach - In a between-participant design, participants (n approximate to 95) chose from among two investments using BSCs. Participants were randomly assigned to one of three conditions: no environmental data (control or BSC condition); environmental data embedded within the traditional BSC (four-perspective SBSC); or environmental data added to a BSC as a standalone fifth perspective (five-perspective SBSC). Findings - Investment to achieve environmental stewardship objectives was greater with the four-perspective SBSC than the traditional BSC. In addition, participants were most efficient, i.e. spent the least total time, and least time per data element examined, with the four-perspective SBSC. Finally, the time spent examining, and decision weight given to, environmental data were unrelated. Research limitations/implications - Professional managers and accountants may have greater knowledge of environmental metrics than do students, who are the participants in this study; hence, the results may not generalize to higher knowledgeable professionals since their processing of environmental data may differ from the lower knowledge participants of this study. Practical implications - The form (i.e. organization) of environmental accounting data changed the allocation of participants' attention while the presence of environmental accounting data changed participants' investments; hence, both the presence and form of environmental accounting information influenced decision making. Originality/value - This study is among the first to show differing influences from both the presence and organization of environmental accounting data on attention and investment.