There is a broad consensus about Small and Medium‐sized Enterprises' (SMEs) responsibility for global pollution, resource consumption, and waste generation. However, numerous researchers have identified a research gap in the context of SMEs' managerial and operational environmental insights. Concretely, this gap involves management commitment, the drivers and barriers to sustainability, and their impact on SMEs' environmental performance. This study, grounded on the institutional, stakeholder, and upper echelon theories, fills this gap. We test our hypotheses using a quantitative empirical approach with structural equation modeling on a dataset of 351 SMEs. Our findings show the key role of management commitment to environmental performance in SMEs since it exerts a positive mediating effect on the relationship between the drivers of sustainability and environmental performance. Based on the Upper Echelon Theory, results demonstrate the relevance of the mediating effect of management commitment (values, skills, and attitudes) to encourage sustainable business models of SMEs in order to reduce pollution, emissions, energy consumption, and noise, as well as promote the development of sustainable products and facilities.

Innovation facilitates how SMEs respond to market changes and maintain their competitive advantage. This paper analyses the relationship between the degree of innovation (measured as innovation in products, processes and administration systems) and performance among 1,091 Spanish manufacturing SMEs. The results show that innovation positively impacts SMEs performance in low and high technology industries. Innovation was more important to achieving a competitive advantage to high technology firms than low technology firms. These results support innovation as being important to a firm's sustainable competitive advantage.