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Abstract The rapid rise in demand for sustainably produced goods over the last decade has made integrating environmental sustainability practices into the supply chain a strategic capability for many businesses. Despite the rapid growth of green supply chain management research, scholars have not fully examined supplier development in the context of the adoption of environmentally sustainable practices. Our study aimed to investigate the relationship between green supplier development strategies and supplier adoption of natural resource‐based view (NRBV) strategies, as well as their impact on green supply chain management (GSCM) practices. We make a significant contribution in this field by integrating a natural‐resource‐based view and a dynamic capabilities perspective to investigate how firms in developing economies overcome the environmental sustainability capability deficiencies of small and medium‐sized enterprises and are able to develop and implement environmentally sustainable practices. Based on a survey of 167 manufacturing companies in Kenya, the findings reveal that focal firms' indirect environmental sustainability supplier development strategies significantly impact environmental sustainability practices among suppliers and that the focal firm‐supplier dyadic relational capabilities significantly affected suppliers' implementation of environmental sustainability practices. Furthermore, focal firms' resource investment (financial and capital) in environmentally sustainable supply chain management programs to develop suppliers has a significant impact on suppliers' implementation of environmental sustainability practices.