The scope for environmental management accounting (EMA) has perpetually received attention in recent years, and it has become a pillar of sustainability in addressing environmental and service delivery challenges. Most scholars focused on EMA in a corporate context, limited attention has been given to local governments in available scholarly articles except for various initiatives by the United Nations to guide local governments in adopting and implementing sustainable environmental management practices. This has continued to affect the uptake of EMA in local governments, particularly in developing economies, as the question concerning the role of EMA practices (EMAPs) in environmental and service delivery remains unexplored. A systematic literature review (SLR) through the use of Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) to identify EMAPs and their role in promoting environmental and service delivery performance (SDP) in local governments was employed. Articles from Google Scholar and Scopus published between 2000 and 2023 were considered. The researchers identified and evaluated energy accounting, material flow accounting, water management accounting, carbon management accounting and biodiversity management accounting as effective EMAPs to address local governments’ environmental and service delivery challenges. Furthermore, a conceptual framework to integrate EMAPs with environmental improvement and service delivery plans was developed and has implications for policymakers, communities, government and environmental specialists. The lessons learned from the research are pertinent to developing sustainable cities in emerging economies and further expose the need for further research to consider accounting approaches from higher-income countries as benchmarks for future development of ecosystem accounting to assist local governments in managing environmental challenges.