How do small and medium sized enterprises (SMEs) adopt environmental innovations? Do they have the necessary internal competence? Is any support offered by external parties? What are the policy implications? This book is based on extensive fieldwork, conducted in four traditional industrial sectors - offset printing, electroplating, textile finishing, and industrial painting. The work was carried out in Denmark, Italy, the Netherlands, Portugal and the UK. 20 company-based case studies were analyzed and a telephone survey was conducted among 527 companies. As a result, the Innovation Triangle came to be formulated, which is presented here, defining and combining the determinants of SME innovativeness. The Innovation Triangle distinguishes three major determinants of innovativeness: business competence, environmental orientation, and network involvement. It allows one to diagnose current environmental and innovation policies, indicating which policy measures might be effective in increasing the adoption of environmentally friendly technologies, allowing environmental objectives to be achieved.