A groundbreaking study has unveiled compelling evidence on how Environmental Management Accounting (EMA) practices and Carbon Emission Management (CEM) critically influence Environmental, Social, and Governance (ESG) performance within Bangladesh’s manufacturing sector. Employing advanced analytical techniques, researchers have shed light on the strategic interplay between accounting-based environmental management and carbon-focused initiatives, revealing profound implications for sustainable industrial development. This comprehensive investigation challenges conventional perspectives by demonstrating not only direct effects but also complex synergistic dynamics that amplify firms’ sustainability outcomes.
The research centered on the multifaceted dimensions of EMA, dissecting how components such as Eco-Efficiency Improvement (EEI), Environmental Cost Tracking (ECT), Life Cycle Assessment Integration (LCAI), and Environmental Reporting Transparency (ERT) contribute to enhancing ESG metrics. Utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM), the study found statistically significant positive impacts from each EMA dimension on overall sustainability performance indicators. These findings augment the growing literature arguing the indispensability of granular environmental accounting techniques in embedding sustainability into corporate decision-making processes, particularly in developing economies fraught with environmental challenges.
Simultaneously, the study spotlighted Carbon Emission Management (CEM) as a pivotal factor exerting substantial direct influence on ESG performance, corroborating the critical role of carbon-centric strategies in corporate environmental responsibility frameworks. The direct positive correlation underscores that firms proactively managing their carbon footprints achieve superior performance in environmental and social governance benchmarks, aligning with global sustainability standards. This emphasis on carbon metrics marks a significant evolution in how emerging market enterprises perceive and operationalize their environmental obligations.
Perhaps most notably, an interaction analysis unveiled a significant moderating role of CEM in the relationship between EMA practices and ESG performance. This moderating effect indicates that firms implementing both EMA and CEM strategies concurrently benefit from amplified sustainability outcomes beyond the sum of their individual contributions. This synergy reflects a dynamic organizational approach where accounting systems and carbon control mechanisms coalesce, enabling firms not only to track environmental impacts but also to strategically mitigate emissions with greater efficacy. The insight is particularly salient for industries like garment manufacturing, where environmental scrutiny and carbon emissions are intensely regulated and publicly monitored.
Adding further depth, the study employed fuzzy-set Qualitative Comparative Analysis (fsQCA) to unravel configurational patterns that drive high ESG performance. Unlike traditional linear models, fsQCA highlights equifinality—the principle that multiple distinct combinations of EMA and CEM practices can lead to excellent sustainability outcomes. Such configurational logic illuminates the complex, context-dependent pathways firms may navigate to enhance their ESG credentials, moving beyond one-size-fits-all prescriptions. It demonstrates that successful sustainability management involves the alignment of diverse, complementary practices rather than isolated interventions.
The implications for policymakers and industrial stakeholders are profound. Financial incentives such as tax breaks, subsidies, or access to preferential green financing can stimulate broader adoption of EMA practices. These mechanisms would support innovations in eco-efficiency, cost tracking, and transparency, which are fundamental enablers of sustainability. Furthermore, mandating stringent environmental reporting aligned with established global frameworks like the Global Reporting Initiative (GRI) or Sustainability Accounting Standards Board (SASB) would institutionalize transparency, fostering accountability across the manufacturing spectrum.
Regulatory frameworks should also integrate CEM into existing environmental compliance schemas, with potential policy instruments including sector-specific carbon reduction quotas or economy-wide carbon trading markets. These measures would compel firms to embed carbon management into their operational core, thereby enhancing the effectiveness of their EMA initiatives. National guidelines and standardized toolkits tailored to local industrial contexts could demystify the adoption process, particularly benefiting small and medium-sized enterprises that often face resource constraints.
Capacity building emerges as another critical pillar. Investments in technical education through workshops, formal training, and certification programs in collaboration with academic institutions and environmental consultancy firms would bolster organizational competencies. As firms gain proficiency in both EMA and CEM methodologies, they can more seamlessly integrate sustainability metrics into strategic planning and operational routines, elevating their competitive positioning in increasingly conscious global markets.
Non-financial incentives, such as establishing a “Sustainable Industry Award,” could amplify the reputational benefits of environmental stewardship. Public recognition fosters a culture of excellence and peer-driven motivation, which can accelerate the diffusion of best practices. Equally important is the facilitation of public–private partnerships (PPPs), which serve as conduits for transferring green technologies and innovative solutions. By bridging government, research institutions, and industry, PPPs can catalyze scalable environmental innovations that are economically viable and contextually appropriate.
Theoretically, this research harmonizes perspectives from the Resource-Based View (RBV) and Institutional Theory, enriching the academic discourse on sustainability accounting. EMA practices embody rare, valuable, and difficult-to-imitate capabilities that provide firms with strategic advantages in a resource-constrained, environmentally exigent landscape. These internal resources enable companies to navigate complex sustainability challenges more adeptly than competitors lacking such competencies. Meanwhile, CEM reflects external institutional pressures—regulatory mandates, stakeholder expectations, and societal norms—that compel firms toward environmental conformity for legitimacy and long-term viability. The interplay between these internal capabilities and external imperatives shapes organizational behaviors fundamental to achieving superior ESG performance.
Methodologically, the incorporation of both PLS-SEM and fsQCA represents an innovative dual approach. PLS-SEM’s validation of hypothesized linear relationships offers clarity on direct causality, while fsQCA’s configurational analysis captures the nuanced, intersecting pathways that organizations follow toward sustainability. This pluralistic methodology recognizes that organizational realities are complex and multifaceted, necessitating analytical tools that reveal both linear trends and combinatorial intricacies. Such depth enhances the robustness and applicability of findings for scholars and practitioners alike.
Despite its contributions, the study acknowledges limitations. Its exclusive focus on Bangladesh constrains generalizability across diverse national contexts that differ in industrial maturity, regulatory environments, and environmental challenges. Future research exploring multiple countries or regions with heterogeneous characteristics could yield more universal insights. Likewise, while the garment manufacturing sector offers a compelling case due to its environmental intensity, expanding the scope to other industries—such as automotive or electronics—could reveal differential impacts and sector-specific nuances of EMA and CEM integration.
Longitudinal investigations are another compelling avenue for further inquiry. Tracking firms over extended periods would enable assessment of the persistence and evolution of EMA’s influence on sustainability, as well as the long-term effectiveness of carbon management strategies. Additionally, the role of external variables—such as the fluctuation of environmental policies, the impact of international climate agreements, or shifting market dynamics—warrants closer scrutiny to comprehend the broader systemic factors that shape sustainability trajectories.
This study effectively bridges theory and practice, providing actionable guidance for stakeholders committed to driving sustainable transformation in emerging market industries. By articulating the mechanisms through which accounting and carbon management coalesce to elevate ESG performance, it equips managers, policymakers, and researchers with a refined understanding of sustainability’s multidimensional architecture. The insights gained herald a future where environmental accountability is not merely regulatory compliance but a strategic imperative woven into the organizational fabric.
In the wake of escalating climate risks and growing societal demands for corporate responsibility, the study’s findings resonate globally. Emerging economies like Bangladesh, often grappling with balancing industrial growth and environmental stewardship, stand to benefit significantly from integrated EMA and CEM frameworks. This holistic approach promises not only improved sustainability metrics but also enhanced competitiveness and resilience amid evolving regulatory and market landscapes.
Ultimately, this research invites a paradigm shift—prompting industries and regulators alike to adopt a nuanced, multidimensional perspective on environmental management. It highlights that the journey towards sustainable manufacturing is neither linear nor singular but composed of intertwined practices and contextual strategies that, when harmonized, drive profound improvements in ESG outcomes. As environmental challenges intensify, such integrated, empirically grounded approaches will be indispensable in shaping resilient and responsible industrial futures.
Subject of Research: The impact of Environmental Management Accounting (EMA) and Carbon Emission Management (CEM) practices on Environmental, Social, and Governance (ESG) performance in the Bangladeshi manufacturing sector, focusing on their direct effects, interaction, and configurational influences.
Article Title: Nexus of environmental management accounting, and carbon emission management on environmental, social, and governance performance: evidence from symmetrical and asymmetrical approach.
Article References:
Xia, L., Fatema, N., Rahman, M.M. et al. Nexus of environmental management accounting, and carbon emission management on environmental, social, and governance performance: evidence from symmetrical and asymmetrical approach.
Humanit Soc Sci Commun 12, 1073 (2025). https://doi.org/10.1057/s41599-025-05465-9
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