Abstract/Summary

Environmental Management Accounting (EMA) has become an essential tool for integrating sustainability into organizational strategic decision-making, addressing pressing challenges such as climate change, resource depletion, and ecological degradation. Despite its growing importance, there remains a critical gap in understanding how EMA can be proactively and authentically implemented to support sustainable development, and how specific EMA tools can be identified and utilised for strategic decision-making. This research addresses this gap through a comprehensive three-paper study, each examining distinct aspects of EMA’s role in fostering sustainability within organizations. The first paper investigates the motivations behind EMA usage and its application in strategic decision-making. This study investigates why and how EMA is used for strategic decision-making. A systematic literature review was conducted, and factors influencing EMA usage for strategic decision-making were identified using the drivers–enablers–outcomes– barriers framework. The study identifies legitimacy, organizational efficiency, and strategic sustainable development as primary drivers, highlighting an evolving use of EMA from short-term operational benefits to recognizing its long-term potential for strategic sustainable development driven by management’s environmental responsibility and proactive leadership commitment. The second paper investigates how institutional and social behaviours influence EMA usage for decision-making. This study utilizes institutional logics theory and social value orientation theory as its theoretical frameworks and employs qualitative methods using interviews with top managers in Indian private hospitals. It reveals that while proself motivations such as cost reduction and resource efficiency drive the initial adoption of EMA, prosocial motivations including social responsibility and sustainable development, promote the adoption of more comprehensive sustainability practices. Nonetheless, proself strategic motivations like competitive advantage, are also important in enhancing the use of integrated and advanced EMA tools. The study emphasizes the importance of aligning strategic priorities with EMA initiatives and integrating stakeholder perspectives to ensure authentic sustainability integration, while also identifying challenges such as resource constraints and regulatory compliance. The third paper develops a theoretical framework for Sustainability Management Accounting (SMA), designed to integrate both environmental and social dimensions into decision-making processes. This framework categorizes SMA tools based on their environmental and social impacts, facilitating stakeholder engagement and iterative feedback mechanisms. Framed using stakeholder theory and knowledge-to-action theory, the framework provides a structured approach for organizations to effectively retrieve and utilize sustainability information, promoting continuous improvement and strategic alignment with global sustainability goals. Collectively, this research advocates for a pragmatic, incremental approach to sustainability accounting, emphasizing the need to align operational and strategic priorities with sustainability objectives, while highlighting the essential role of stakeholder integration. By shifting the emphasis from compliance-focused reporting to fostering accountability and enhancing managerial decision-making, EMA is positioned as a strategic enabler of sustainability. The research contributes to both theory and practice by deepening the understanding of the evolving reasons behind EMA use in decision-making, advancing the notion of incremental and practical approaches to sustainability accounting, and presenting a usable framework for integrating EMA into organizational routines. For academic audiences, the study provides robust theoretical underpinnings that invite further research into the intersection of management accounting and sustainability. For practitioners and accountants, it offers practical tools and insights to embed sustainability meaningfully into strategic processes, encouraging responsible and outcome-driven practices. This comprehensive approach strengthens the conceptual foundations of EMA while equipping organizations to achieve long-term environmental and social sustainability through informed, integrated decision-making.