["Business Strategy and the Environment, EarlyView. ", "\nABSTRACT\nEnvironmental management accounting (EMA) is increasingly recognised as essential for carbon governance, accountability and net zero transitions, yet research has overlooked how sustainability is negotiated within mission‐driven but commercially exposed service organisations such as private hospitals in developing economies, a sector often overshadowed in sustainability debates despite its significant environmental footprint. This study addresses this gap by examining how competing healthcare, commercial and sustainability priorities shape EMA adoption and use in Indian private hospitals, an institutional setting underexplored in sustainability accounting despite its complex interplay of professional norms, commercial pressures and emerging sustainability expectations. Drawing on 18 interviews across 12 hospitals, the study integrates institutional logics and social value orientation theory to analyse how structural pressures and managerial motivations jointly influence EMA practices. Findings show that hospitals initially mobilise EMA for compliance, legitimacy and cost efficiency, reflecting pragmatic, proself motivations tied to operational requirements. As these practices become embedded, EMA evolves into a strategic mechanism that supports wider sustainability actions, linking efficiency gains with competitive advantage, reputational positioning and initiatives complementing core healthcare delivery. With rising sustainability logics and community expectations, EMA use shifts toward prosocial orientations that strengthen accountability and support strategic sustainable development. Overall, the study demonstrates that EMA helps hospitals navigate competing institutional pressures through a pragmatic, stepwise progression—from basic tools such as energy and water accounting to more advanced and integrated practices including carbon accounting and integrated resource management. In doing so, it shows how organisational trade‐offs can be reframed as complementarities and contributes to debates on how pragmatic EMA practices can evolve toward more critical, accountability‐oriented sustainability accounting.\n"]