Firms are under pressure to invest in environmental management systems (EMSs) to reduce the environmental impacts of their activities. Many advocates of EMS adoption promote the idea of ‘win–win’ gains, where improvements in environmental performance are accompanied by financial rewards. The empirical evidence on this is mixed and suggests that the' right' conditions must exist within the firm for genuine environmental performance gains to materialize. The paper uses a survey of 129 Spanish manufacturing firms to investigate managerial perceptions about what these right conditions might be. Results indicate that enhanced environmental performance following EMS adoption is linked to managers' belief in the win–win paradigm, and that managers who adhere to the win–win story also tend to integrate other stakeholder demands into their business strategies. Policy implications conclude the paper. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.