ENVIRONMENTAL UNCERTAINTY AND SUSTAINABLE PERFORMANCE: THE DUAL ROLE OF ENVIRONMENTAL MANAGEMENT ACCOUNTING

Abstract

In resource-dependent economies, the interplay between factors such as environmental uncertainty (EU), environmental management accounting (EMA), and sustainable performance (SP) is understudied, especially in high-risk industries like oil and gas. This study examines the relationship between these factorsin the Iraqi oil and gas business, which is institutionally fragile, environmentally vulnerable, and dependent on fossil fuel exports. The effects ofEU on EMA and SP, as well as the direct and mediating role of EMA on SP. The study population is represented by middle managers of these companies. A total of 119 responses were collected via survey questionnaires and analysed using Smart PLS 4. The finding showed that the EU and its dimensions of technology uncertainty and competitive uncertainty have a significant positive impact on SP. The EU also positively affected the EMA, which in turn positively affected SP and mediated the effect of the EU on SP. This study contributed to the literature by combining internal and external environments using contingency theory and resource-based view theory. Institutionalising EMA in strategic and operational frameworks with innovative capability, governance procedures, and stakeholder interaction is emphasized. The study suggests legislative reforms, tax incentives, and capacity-building to encourage EMA implementation.