Type of the article: Research ArticleAbstractThe study aims to explore the effect of institutional pressures (INP) on environmental management accounting (EMA) and the mediating role of sustainable corporate governance (SCG) on the effects of EMA on sustainability performance. The partial least squares structural equation modeling (PLS-SEM) was applied to test the hypotheses. Data were gathered through a survey of 298 publicly listed companies in Saudi Arabia, using questionnaires distributed to executives, financial managers, accountants, and board members. The results show that INP has a significant positive effect on EMA (β = 0.295, T = 6.062); in turn, EMA has a significant positive effect on environmental (β = 0.295), social (β = 0.332), and economic (β = 0.332) performance. Mediation analysis demonstrates that SCG acts as a significant mediator between INP and EMA (β = 0.113, T = 2.366), and EMA shows significant mediation between INP and environmental (β = 0.115), social (β = 0.126), and economic (β = 0.174) performance. These findings demonstrate that INP has both direct and indirect impacts on sustainability performance through EMA. A robust SCG structure strengthens the linkage between external INP and EMA adoption and provides the linkage with an internal legitimating mechanism. These outcomes bring forward the role of EMA as a mediating variable for materializing the effects of external pressures driven by the legitimacy needs into sustainability performance. The findings add to the body of knowledge of institutional theory by emphasizing the role of concurrent external institutional forces and internal factors that affect corporate sustainability performance.
Sulaiman Alsughayer (2026) studied this question.