Purpose-This paper aims to explore the extent to which Chinese businesses are ready for Environmental Management Accounting (EMA) development as a means to help address ongoing tensions between economic growth and environmental degradation. Design/methodology/approach-Case studies were conducted in three large manufacturing companies in the Central China region. Data gathering included 34 interviews with managers at different levels and departments in these companies. Findings-Through the institutional lens of EMA development, it was found that coercive and cognitive institutions have helped build the potential for EMA development. Coercive institutions encouraging corporate EMA development are manifested through increasing regulatory pressure for environmental management and reporting and increasing pressure for compliance under certified environmental management systems. Cognitive pressures are mainly from the perceived need for cognition by international supply chain alliances. Results also revealed that normative institutions serve to reduce the positive impacts of coercive and cognitive institutions on EMA development. Research limitations/implications-Findings imply that managers in heavy manufacturing companies are generally willing to change and prepare for EMA development under perceived high regulatory, economic, environmental and international pressures. However, the readiness of managers to embrace EMA depends on how soon concerns about regulatory inconsistency at local levels and low environmental awareness among employees can be resolved. Originality/value-This is the first study of EMA in the largest developing country. It enhances the understanding of environmental activities in business and identifies issues associated with the development of EMA in Chinese industries.