Environmental Governance as a Mediating and Moderating Variable Between Environmental Auditing and Sustainable Performance

ABDULHUSSEIN, Azher Subhi; ABBAS, Ali Abdulhassan

Environmental Governance as a Mediating and Moderating Variable Between Environmental Auditing and Sustainable Performance

Foundations of Management

Volume 17 (2025): Issue 1 (January 2025)

By: Azher Subhi ABDULHUSSEIN

and Ali Abdulhassan ABBAS

Open Access

|Mar 2025

Figures & Tables

Hypothesis development
(Source: Authors’ own research) — Hypothesis development (Source: Authors’ own research)

Visualization of scatter plots, distributions, and correlations
(Source: Authors’ own research) — Visualization of scatter plots, distributions, and correlations (Source: Authors’ own research)

Structural model (main hypothesis)
(Source: Authors’ own research) — Structural model (main hypothesis) (Source: Authors’ own research)

Structural model (subhypothesis)
(Source: Authors’ own research) — Structural model (subhypothesis) (Source: Authors’ own research)

Visualization of effect size
(Source: Authors’ own research) — Visualization of effect size (Source: Authors’ own research)

Measurement model (Source: Authors’ own research)

Item <- Construct	Loadings	CR	AVE
Cut-off	>0.4	>0.6	>0.4
COM1 <- Environmental commitment	0.708	0.841	0.471
COM2 <- Environmental commitment	0.73
COM3 <- Environmental commitment	0.812
COM4 <- Environmental commitment	0.646
COM5 <- Environmental commitment	0.586
COM6 <- Environmental commitment	0.612
EXM1 <- Environmental Examination	0.423	0.672	0.423
EXM2 <- Environmental Examination	0.616
EXM3 <- Environmental Examination	0.843
FIN1 <- Environmental financial analysis	0.652	0.797	0.569
FIN2 <- Environmental financial analysis	0.834
FIN3 <- Environmental financial analysis	0.766
FJ1 <- Fairness and justice	0.447	0.796	0.446
FJ2 <- Fairness and justice	0.765
FJ3 <- Fairness and justice	0.624
FJ4 <- Fairness and justice	0.72
FJ5 <- Fairness and justice	0.735
TRS1 <- Transparency	0.844	0.829	0.619
TRS2 <- Transparency	0.76
TRS3 <- Transparency	0.753
ACC1 <- Accountability principle	0.67	0.8	0.574
ACC2 <- Accountability principle	0.846
ACC3 <- Accountability principle	0.746
PRT1 <- Participation	0.751	0.752	0.512
PRT2 <- Participation	0.839
PRT3 <- Participation	0.518
EVL1 <- Evaluation	0.411	0.708	0.464
EVL2 <- Evaluation	0.741
EVL3 <- Evaluation	0.822
EFF1 <- Effectiveness	0.753	0.768	0.526
EFF2 <- Effectiveness	0.644
EFF3 <- Effectiveness	0.772
ECN1 <- Economic performance	0.58	0.843	0.407
ECN2 <- Economic performance	0.462
ECN3 <- Economic performance	0.614
ECN4 <- Economic performance	0.667
ECN5 <- Economic performance	0.563
ECN6 <- Economic performance	0.731
ECN7 <- Economic performance	0.768
ECN8 <- Economic performance	0.664
SOC1 <- Social performance	0.665	0.847	0.484
SOC2 <- Social performance	0.833
SOC3 <- Social performance	0.573
SOC4 <- Social performance	0.672
SOC5 <- Social performance	0.799
SOC6 <- Social performance	0.592
ENV1 <- Environmental performance	0.932	0.836	0.521
ENV2 <- Environmental performance	0.585
ENV3 <- Environmental performance	0.916
ENV4 <- Environmental performance	0.559
ENV5 <- Environmental performance	0.496

Discriminant validity (Source: Authors’ own research)

	ACC	ECO	EFF	EXM	COM	FIN	ENV	EVL	FJ	PRT	SOC	TRS
ACC	-	-	-	-	-	-	-	-	-	-	-	-
ECO	0.489	-	-	-	-	-	-	-	-	-	-	-
EFF	0.176	0.129	-	-	-	-	-	-	-	-	-	-
EXM	0.218	0.231	0.369	-	-	-	-	-	-	-	-	-
COM	0.403	0.475	0.253	0.335	-	-	-	-	-	-	-	-
FIN	0.151	0.182	0.307	0.471	0.226	-	-	-	-	-	-	-
ENV	0.35	0.486	0.206	0.231	0.503	0.069	-	-	-	-	-	-
EVL	0.332	0.433	0.28	0.245	0.471	0.204	0.552	-	-	-	-	-
FJ	0.404	0.328	0.169	0.249	0.581	0.21	0.503	0.524	-	-	-	-
PRT	0.36	0.247	0.428	0.446	0.208	0.285	0.159	0.255	0.237	-	-	-
SOC	0.462	0.498	0.259	0.175	0.37	0.136	0.757	0.521	0.423	0.188	-	-
TRS	0.557	0.333	0.17	0.292	0.422	0.115	0.433	0.539	0.551	0.267	0.58	-

Structural model assessment f (Source: Authors’ own research)

	f²	VIF	R²	R²Adj.	Q²
Cut-off	>0.02	<5	>0.1		>0
Main hypotheses
Environmental auditing -> Sustainable performance	0.052	1.124	0.263	0.251	0.07
Environmental governance -> Sustainable performance	0.2	1.119
AUD*GOV -> Sustainable performance	0.001	1.007
Environmental auditing -> Environmental governance	0.117	1	0.105	0.1	0.017
Subhypotheses
Environmental auditing -> Economic performance	0.157	1.314	0.183	0.173	0.052
Environmental governance -> Economic performance	0.001	1.314	0.183	0.173	0.052
Environmental auditing -> Environmental governance	0.314	1	0.239	0.235	0.034
Environmental auditing -> Environmental performance	0.071	1.314	0.258	0.25	0.12
Environmental governance -> Environmental performance	0.108		0.258	0.25	0.12
Environmental auditing -> Social performance	0.014		0.288	0.28	0.116
Environmental governance -> Social performance	0.238		0.288	0.28	0.116

Descriptive statistic (Source: Authors’ own research)

H	Path	B	t-value	P-value	95% BCCI		Remark
H	Path	B	t-value	P-value	LB	UB	-
Direct effect
H1	Environmental auditing -> Sustainable performance	0.208	2.279	0.023	0.029	0.391	Supported
H1.1	Environmental auditing -> Economic performance	0.41	1.976	0.048	-0.59	0.601	Supported
H1.2	Environmental auditing -> Social performance	0.114	1.04	0.299	-0.139	0.282	Not supported
H1.3	Environmental auditing -> Environmental performance	0.264	3.286	0.001	0.098	0.417	Supported
H2	Environmental auditing -> Environmental governance	0.324	4.256	0	0.129	0.443	Supported
H3	Environmental governance -> Sustainable performance	0.406	5.909	0	0.257	0.531	Supported
H3.1	Environmental governance -> Economic performance	0.033	0.164	0.87	-0.44	0.331	Not supported
H3.2	Environmental governance -> Social performance	0.472	7.132	0	0.346	0.583	Supported
H3.3	Environmental governance -> Environmental performance	0.324	4.741	0	0.158	0.43	Supported
Moderating role
H4	AUD*GOV -> Sustainable performance	-0.022	0.332	0.74	-0.143	0.12	Not supported
Indirect effect (mediating role)
H5	Environmental auditing -> Environmental governance -> Sustainable performance	0.131	3.349	0.001	0.058	0.206	Supported
H5.1	Environmental auditing -> Environmental governance -> Economic performance	0.016	0.153	0.878	-0.245	0.17	Not supported
H5.2	Environmental auditing -> Environmental governance -> Social performance	0.231	4.449	0	0.143	0.304	Supported
H5.3	Environmental auditing -> Environmental governance -> Environmental performance	0.158	3.665	0	0.062	0.225	Supported

Summary of mediation analysis (Source: Authors’ own research)

Independent	Mediator	Dependent	Direct Effect	Indirect Effect	Mediation
Environmental auditing	Environmental governance	Sustainable performance	Significant	Significant	Partial
Environmental auditing	Environmental governance	Economic performance	Significant	Insignificant	No
Environmental auditing	Environmental governance	Social performance	Insignificant	Significant	Full
Environmental auditing	Environmental governance	Environmental performance	Significant	Significant	Partial

High Rank of Citations (Source: Authors' own research)

Name	Type of the variable	Dimensions	Number of questions	Sources
Environmental audit	Independent	Environmental commitment	1–10	(Yu, et al., 2019); (Byambaa and de Vries, 2020); (Tao, et al., 2022)
		Environmental screening	11–18
		Environmental financial analysis	19–24
Environmental governance	Moderator and mediator	Fairness and justice	25–30	(Tan and Geng, 2020) (Amarra, 2019; Kamel, Abdali and Abbas, 2024) (Sidique, 2024) (Ernst, 2019) (Gupta, Boas and Oosterveer, 2020) (Yu, et al., 2022)
		Transparency	31–36
		The principle of accountability	37–40
		Share	41–43
		Evaluation	44–47
		Effectiveness	48–52
Sustainable performance	Dependent	Economic performance	53–69	(Wang, et al., 2022; Żywiolek, Rosak-Szyrocka and Abbas, 2022; Denu, Bentley and Duan, 2023)
		Social performance	70–82
		Environmental performance	83–94

DOI: https://doi.org/10.2478/fman-2025-0001 | Journal eISSN: 2300-5661 | Journal ISSN: 2080-7279

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Language: English

Page range: 7 - 24

Published on: Mar 21, 2025

Published by: Warsaw University of Technology

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

Environmental Auditing,

EG,

Sustainability,

Economic Performance,

Sustainable Performance,

Iraqi Environmental Policies

Related subjects:

Computer sciences,

Business computing,

Business and economics,

Business management,

Management accounting, financial controlling, cost calculation, investment

© 2025 Azher Subhi ABDULHUSSEIN, Ali Abdulhassan ABBAS, published by Warsaw University of Technology
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 17 (2025): Issue 1 (January 2025)Next article

Environmental Governance as a Mediating and Moderating Variable Between Environmental Auditing and Sustainable Performance

Figures & Tables

Figure 1.

Figure 2.

Figure 3.

Figure 4.

Figure 5.

Figure 6.

Measurement model (Source: Authors’ own research)

Discriminant validity (Source: Authors’ own research)

Structural model assessment f (Source: Authors’ own research)

Descriptive statistic (Source: Authors’ own research)

Summary of mediation analysis (Source: Authors’ own research)

High Rank of Citations (Source: Authors' own research)

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