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Environmental sustainability orientation has emerged to drive firms into eco-friendly production. Yet, the consequence of this new strategic thinking on firms’ green innovations, especially small- and medium-scale enterprises (SMEs), remains unresolved. Recognizing that the connection between environmental sustainability orientation and green innovation may not always be direct, the study theorizes that dynamic capability and entrepreneurial orientation may form part of the boundary conditions that strengthen its effect on small enterprises’ green innovation. The study adjoins the dynamic capability theory with the entrepreneurial orientation theory to test this relationship among small businesses within a developing economy. Results from the partial least squares–structural equation modeling (PLS-SEM) suggest that environmental sustainability orientation will result in green innovation when the SME’s dynamic capability can develop a creative reconfiguration of knowledge and new distinctive resources to support this new strategic direction. Similarly, findings from the study suggest that environmental sustainability orientation will translate into better green innovation outcomes when the SME entrepreneurial orientation has a solid attraction to protect the ecosystem and does not perceive green innovation as a risky enterprise.

Organizational Development and Change (ODC) has been called to aid organizational greening goals. Carbon labeling of products by organizations is a common greening strategy. However, its effectiveness is dependent on supportive consumer behavior. The Theory of Planned Behavior (TPB) is used to explain actor choice in buying low carbon products (LCPs). Actual buying behavior of 873 subjects in China, a country new to carbon labeling, demonstrated that Declarative norms, Attitude, and Perceived behavioral control explained significant variance in actual buying behavior of LCPs. The TPB model may be better served by observing actual behavior versus behavioral intention. Revisions to the TPB model for diagnosis and interventions in behavioral change are indicated. ODC should revert to theoretically informed practice versus the increasing reliance on A-theoretical tools and techniques.