Sustainability Accounting Information and SME Sustainability Performance: The Role of Accounting Literacy, Waste Management, and Sustainability Reporting

Abstract

This study investigates the influence of Green Accounting, Sustainability Accounting Literacy, and Waste Management on the Sustainability Performance of SMEs, with Sustainability Reporting as a mediating variable within a VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) environment. The primary problem addressed is the limited integration of sustainability practices among SMEs, particularly in terms of reporting mechanisms and knowledge-based capabilities. This research adopts a quantitative approach using Structural Equation Modeling (SEM) with AMOS, based on data collected from 135 SME respondents in East Java, Indonesia. The findings reveal that Sustainability Accounting Literacy has a positive and significant effect on sustainability performance, both directly and indirectly through Sustainability Reporting. Waste Management does not exert a direct effect but shows a significant indirect impact through the mediating role of reporting. In contrast, Green Accounting does not demonstrate a significant influence on sustainability performance. These results suggest that knowledge-based capabilities play a more critical role than technical accounting practices in enhancing SME sustainability. Furthermore, Sustainability Reporting serves as a strategic mechanism to improve transparency and stakeholder legitimacy. This study contributes theoretically by integrating dynamic capabilities into sustainability accounting and offers practical insights for SMEs operating under VUCA conditions.