SUMMARY
Sustainability in the water sector in Europe is a major concern, and compliance with the current legislation alone does not seem to be enough to face major challenges like climate change or population growth and concentration. The greatest potential for improvement appears when companies decide to take a step forward and go beyond environmental legislation. This study focuses on the environmental responsibility (ER) of European small and medium-sized enterprises (SMEs) in the water and waste management sector and analyzes the drivers that lead these firms to the adoption of more sustainable practices. Our results show that up to 40% of European SMEs within this industry display environmental responsibility. Market pull has a low incidence in encouraging ER, while values and the strategic decisions of entrepreneurs seem decisive. Policy makers should prioritize subsidies over fiscal incentives because they show greater potential to promote the adoption of environmental responsibility among these firms.