The Effect of Environmental Management Accounting and Green Transformational Leadership on Environment, Social, Governance (ESG) Performance: Green Innovation as Mediating Variable

Abstract

This paper analyzes the effect of environmental management accounting and green transformational leadership on environment, social, and governance (ESG) performance, with green product innovation and green process innovation as mediating variables. This research adopts a quantitative method and survey method. This study relied on self-reported primary data from a self-administered survey by spreading questionnaires to collect primary data from 263 chief executive officers and finance managers of manufacturing companies in Banten Province. One measurement was analyzed using structural equation modeling (SmartPLS 3.3). Twenty-eight (28) hypotheses were proposed: Environmental Management Accounting (EMA) has a positive effect on Green Process Innovation (GPI1); Environmental Management Accounting (EMA) has a positive effect on Green Product Innovation (GPI2); Green Transformational Leadership (GTL) has a positive effect on Green Process Innovation (GPI1); Green Transformational Leadership (GTL) has a positive effect on Green Product Innovation (GPI2); Environmental Management Accounting (EMA) has a positive effect on Environmental Performance (EP); Environmental Management Accounting (EMA) has a positive effect on Social Performance (SP); Environmental Management Accounting (EMA) has a positive effect on Governance Performance (GP); Green Transformational Leadership (GTL) has a positive effect on Environmental Performance (EP); Green Transformational Leadership (GTL) has a positive effect on Social Performance (SP); Green Transformational Leadership (GTL) has a positive effect on Governance Performance (GP); Green Product Innovation (GPI2) has a positive effect on Environmental Performance (EP); Green Product Innovation (GPI2) has a positive effect on Social Performance (SP); Green Product Innovation (GPI2) has a positive effect on Governance Performance; Green Process Innovation (GPI1) positively impacts Environmental Performance (EP); Green Process Innovation (GPI1) has a positive impact on Social Performance (SP); Green Process Innovation (GPI1) has a positive impact on Governance Performance (GP). Green Process Innovation (GPI1) mediates the effect of Environmental Management Accounting (EMA) on Environment, Social, and Governance Performance (ESG); Green Process Innovation (GPI1) mediates the effect of Environmental Management Accounting (EMA) on Environment, Social, and Governance Performance (ESG); Green Process Innovation (GPI1) mediates the effect of Green Transformational Leadership (GTL) on Environment, Social, and Governance Performance (ESG); Green Process Innovation (GPI1) mediates the effect of Green Transformational Leadership (GTL) on Environment, Social, and Governance Performance (ESG).