Environmental degradation, economic pressures, and the need for sustainable development in Malaysia prompt a paradigm shift in policymaking. This study investigates the relationship between taxation policies, accounting practices, and the performance of the green industry in Malaysia’s MADANI Framework. The methodology involved a systematic literature review. A structured methodology outlines study selection criterion, inclusion/exclusion parameters, and data synthesis strategies. The study shows how taxation, in the form of green taxes and carbon levies, has effectively promoted green innovation and curbed environmental harm. Although the MADANI Framework lays a strong groundwork for embedding such concepts, there are still obstacles, mainly due to industry resistance, poor technology infrastructure, and low public awareness. The results provide practical relevance for policy-makers, industrial players, and scholars, stressing the need for a holistic perspective on environmental sustainability. This has implications for Malaysia and serves as a model for other countries seeking to marry economic needs with environmental responsibility.