Innovating for sustainability: the role of environmental management accounting in driving environmental performance

Abstract

Environmental management accounting (EMA) has emerged as a potentially valuable tool for companies seeking to monitor and manage their ecological impacts. However, the connection between EMA and environmental performance (EP) remains unclear, with prior studies yielding mixed results. Moreover, little is known about the mechanisms through which EMA may influence EP. Therefore, this study seeks to examine the link between EMA and EP, with a particular focus on the mediating influence of green innovation (GI) within the context of SMEs situated in least-developed countries, such as Yemen. To this end, data was gathered from 299 manufacturing SMEs in Yemen and analyzed using PLS-SEM technique via SmartPLS software. The results of the statistical analysis revealed a positive and important effect of EMA on EP. Importantly, GI serves as a partial mediator in the EMA-EP relationship. Therefore, the results of this study add significantly to the current body of literature on sustainability and provide important new perspectives.