Linking Environmental Accounting to Firm Value: The Mediating Effect of ESG Innovation and Stakeholder Engagement
Main article
Abstract
This study investigates the relationship between environmental accounting practices and firm value, with a particular focus on the mediating roles of ESG (Environmental, Social, and Governance) innovation and stakeholder engagement. In the context of growing environmental concerns and increasing regulatory pressures, firms are increasingly expected to integrate sustainability considerations into their accounting and strategic decisions. Using a sample of publicly listed firms across multiple industries, we employ quantitative analyses to examine how environmental accounting disclosures influence firm valuation. Our findings indicate that proactive environmental accounting positively impacts firm value, and this effect is significantly mediated by ESG innovation initiatives, which foster sustainable business practices, and by enhanced stakeholder engagement, which strengthens corporate legitimacy and trust. The results highlight the critical importance of integrating environmental performance metrics with strategic innovation and stakeholder management to create long-term value. This study contributes to the literature on sustainable finance and corporate governance by providing empirical evidence on the mechanisms through which environmental accounting translates into financial performance, offering practical implications for managers and policymakers aiming to promote sustainable business strategies.
