This empirical research explores the environmental attitudes and practices of SMEs in the UK and Japan. The research provides a dynamic picture of the barriers and drivers of environmental reform within small businesses, embedding the findings within broader debates on sustainability and ¿ecological modernisation''(EM) theory. A key conclusion is that an SME policy strategy which relies too heavily on voluntarism and self- regulation is unlikely to be effective due to the many internal and external barriers to environmental management experienced by owner-managers. A more participatory and interventionist approach, combining education initiatives with stricter regulatory controls, market-based instruments and negotiated decision-making is recommended. The responses of business owners also highlight that to achieve environmental goals, it is just as important to encourage a change in culture amongst customers as it is amongst companies. The research recommends that EM scholars broaden their focus to include the ecological modernisation of consumption, and to engage with contested concepts such as ¿sufficiency'' and equity.