How <scp>SMEs</scp> Make Sense of Green Technology Adoption for Sustainability Performance: A Qualitative Perspective on Organizational and Institutional Drivers

ABSTRACT Green technology adoption is increasingly recognized as a critical pathway through which Small and Medium sized Enterprises (SMEs) can improve sustainability performance. However, SMEs operating in emerging economies frequently encounter structural, organizational, and institutional constraints that limit the effective integration of green technologies into their business practices. This study explores how SMEs in Türkiye, as an emerging economy context, make sense of Green Technology Adoption for sustainability performance by adopting an integrated analytical perspective that combines the Technology‐Organization‐Environment (TOE) framework, dynamic capabilities, and institutional theory. Drawing on in depth semi‐structured interviews with 14 key stakeholders from the manufacturing, energy, and consultancy sectors, the findings reveal a “hardware‐rich, software‐poor” imbalance in adoption practices. SMEs predominantly prioritize tangible green technology investments, particularly solar energy systems, to achieve short term cost reductions. In contrast, investments in digital infrastructure and data management capabilities, which are essential for monitoring and managing sustainability performance, remain limited. The analysis further demonstrates that green technology adoption is driven primarily by coercive institutional pressures, most notably the European Union's Carbon Border Adjustment Mechanism (CBAM), rather than by internally developed sustainability strategies. In addition, a prevailing survival mode mindset, shaped by financial volatility and bureaucratic inefficiencies, constrains SMEs' ability to move beyond reactive compliance toward integrated and strategic sustainability practices. By highlighting the gap between physical technology adoption and digital maturity, this study contributes to the sustainability and green technology literature and provides actionable insights for policymakers and managers seeking to support more holistic and enduring sustainability transitions in SMEs.