The over‐exploitation of natural capital and unsustainable production practices has contributed to increased pollution, biodiversity loss, drought, and deforestation. The food and beverage (F&B) sector is one of the largest contributors to the Indonesian economy but it is also responsible for various environmental impacts. Implementing Environmental Management Systems (EMS) is one way to promote improved sustainable practices within organisations, particularly those within the F&B sector. This research investigates the drivers, barriers and incentives for implementing EMS and their causal relationships. Data were collected from 59 F&B companies in East Java, Indonesia. The results indicate that the implementation of EMS tends to be driven internally in an effort to enhance market competitiveness. There is a need for institutions to exert pressures to develop organizational capability to implement EMS. External barriers are significant impeding factors, while internal barriers do not have a direct link to EMS implementation. The moderating role of technical incentives underlines the need to improve infrastructure and policy to support EMS implementation. Theoretical and practical insights for governments and industries are also discussed.