Firms implementing innovation in an environmentally sustainable manner often termed as ‘green innovation’ have regarded it as a strategic imperative for achieving sustainability along with competitive performance. However, the link between green innovation and performance is considerably more complicated and often depends on organizational practices, particularly environmental accounting practices. This conceptual paper investigates the mediating role of environmental accounting practices between green innovation and firm performance. Using stakeholder theory, the Resource-Based View (RBV), and institutional theory to frame the connection. This study proposes a conceptual framework of environmental accounting practices such as environmental cost identification practices to improve the practice of green innovation. Drawing on academic literature between 2019 and 2025, the study offers theoretical and practical recommendations for managers and policymakers who wish to put “sustainability” into practice while aligning to innovation objectives.