Abstract. Small and medium enterprises (SMEs) play a strategic role in contributing to the environment, society, and surrounding communities. One of the SMEs is from the batik industry, identified by the Ministry of Environment as one of Indonesia’s worst causes of river pollution. Excessive water, dye materials, and kerosene stoves cause environmental pollution. Several studies reveal that the batik industry produces quite high CO2 emissions. If batik entrepreneurs do not immediately realize it, it has the potential to lower performance and environmental sustainability; thus, green accounting is expected to affect sustainable performance. This study examines green accounting on sustainable performance with financial performance as an intervening variable involving batik SMEs in Central Java, Indonesia. This research contributes to the literature on green accounting practices by looking at how SMEs in Central Java of Indonesia take their social roles thoughtfully.

Keywords: Green accounting · Financial performance · Sustainable performance · Central Java SMEs