Much of the empirical research focuses on the relationship between eco-innovation and firm performance. This paper first investigates if it pays to be green in SMEs in the EU. While the result is positive, I then investigate the key of firms’ performance when investing in EI by differentiating between two types of EI motivation: proactive and reactive motivation. I scrutinise that proactively-motivated EI is more likely to be beneficial to SMEs than adopting EI due to reactive motivations. Based on a dataset of firms in the EU, I find that SMEs can get benefit from EI adoption, especially when the EI is proactively motivated. This study has also demonstrated that EI is one of the important measures to trigger green growth.