Synergies of green accounting, green tax, and sustainable production for environmental performance

Environmental degradation and climate change pose serious challenges to industrial development, making sustainable practices essential. The pharmaceutical and chemical industries in Bangladesh, while contributing significantly to economic growth, also generate considerable environmental impacts. This study investigates how green accounting and green tax influence environmental performance, both directly and indirectly through sustainable production, in these sectors. Data were collected from 209 employees in pharmaceutical and chemical companies and analysed using structural equation modelling (PLS-SEM). The results show that green accounting and green tax positively affect both sustainable production and environmental performance. Furthermore, sustainable production partially mediates the relationship between green practices and environmental performance. The study contributes to theory by applying institutional theory to explain how organisational and regulatory mechanisms promote sustainability. Practically, it provides managers and policymakers with evidence-based strategies for enhancing environmental performance, such as integrating green accounting, adopting green taxation policies, and promoting sustainable production practices. These findings offer clear guidance for designing policies that support industrial growth while reducing environmental risks.