Integration matters: the relationships between environmental management control systems and environmental and financial performance

Valeria Knels, Edeltraud Guenther and Thomas Guenther

Journal of Accounting & Organizational Change, 2025, vol. 22, issue 7, 66-90

Abstract: PurposeThis study investigates the integration of environmental management control systems (EMCSs) into core business activities and its implication for environmental performance (EP) and financial performance (FP). Prior research highlights the potential benefits of EMCSs but often overlooks integration dimensions and their role in organizational change. This study aims to address these gaps by differentiating the technical and management dimensions of integration in a cross-sectional context.Design/methodology/approachThis study employs a dyadic survey of 112 large German firms to empirically assess the influence of different dimensions on the relationship between EMCSs and performance. Using partial least squares structural equation modeling, we test whether management and technical integration moderate the effectiveness of EMCSs in improving EP and FP.FindingsThe results indicate that integrated EMCSs are associated with improvements in both EP and FP, though the impact varies based on the type of integration. Management integration strengthens the positive link between EMCSs and EP, whereas the positive relationship between EMCSs and FP is contingent upon high levels of technical integration. These findings indicate the conditions under which a win–win scenario for EP and FP may emerge.Originality/valueThis study distinguishes technical and management integration as contingencies in the EMCS–performance relationship and interprets them as deliberate change activities that enable organizational change. The findings suggest that integration can support both performance improvement and organizational transformation tendencies, refining contingency theory and offering managers guidance on embedding sustainability while balancing environmental and financial goals.

Keywords: Environmental management control system; Contingency theory; Integration; Environmental performance; Financial performance; Dyadic survey (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-02-2025-0054

DOI: 10.1108/JAOC-02-2025-0054

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