The present study aims for a deeper understanding of the internal and external factors, such as firm strategy and pressure from the business network (government, buyers, suppliers, local inhabitants, etc.), that have an impact on the adoption of environmental management capabilities in firms in the Dutch food and beverage industry. A recent investigation by the Arthur D. Little Innovation High Ground Survey among 40 multinationals (Sony, Procter & Gamble, Vodafone, etc.) showed that managers in general expect that sustainability-driven innovation, such as environmentally product (re)design, has a growing potential to deliver value to business. However, only 5% indicated to pay attention to environmental issues in their strategic planning and decision-making. These figures would probably look even worse if small- and medium-sized firms were included. This thesis focuses on the commitment to the environment in terms of the adoption of environmental management capabilities. These comprise different environmental management items, such as an environmental action program, regular environmental auditing to evaluate strategic environmental targets, and an environmental database to keep record of environmental performance. In short, they reflect the capacity of the firm to take care of the environment on a structural basis. The study design integrates the outside-in and the inside-out perspective. According to the outside-in perspective, the firm’s competitiveness depends on industrial forces, such as rivalry among competitors and entrance of new market parties. External factors measured in this study are the different stakeholder influences from the business network, including government and societal groups as well as other chain and network actors, such as buyers, suppliers, consumers and bank and insurance firms. The inside-out perspective states that the firm’s competitiveness depends on acquiring valuable resources, competences, and (dynamic) capabilities to deal with the external influences. Internal factors ...