Environmental management accounting affects bank performance with mediators.

Area of Science:

• Environmental Management Accounting
• Financial Performance
• Sustainable Banking

Background:

• Environmental costs are increasingly significant in financial services.
• Integrating environmental accounting is crucial for understanding total cost structures.
• Vietnamese banks face growing pressure to adopt sustainable practices.

Purpose of the Study:

• To estimate the effect of Environmental Management Accounting (EMA) on Vietnamese bank performance.
• To analyze the mediating role of environmental costs in the EMA-performance relationship.
• To explore the influence of knowledge management and green innovation on environmental costs.

Main Methods:

• Mixed-methods approach combining qualitative (expert interviews, surveys) and quantitative techniques.
• Partial Least Squares Structural Equation Modeling (PLS-SEM) for data analysis.
• Estimation of the direct and indirect effects of EMA on bank performance.

Main Results:

• A positive correlation was found between EMA, knowledge management, green innovation, and environmental costs.
• Knowledge management and green innovation significantly enhance environmental costs.
• EMA demonstrates a significant positive relationship with bank performance, mediated by environmental costs.

Conclusions:

• Environmental costs play a critical mediating role in the relationship between EMA and bank performance.
• EMA provides essential information for managing environmental costs within financial services.
• Adoption of EMA can lead to improved bank performance and sustainability in Vietnam.