Over the past decade, sustainable or “green” innovation has occupied a top-ranking position on the agenda of many firms. Sustainable innovation can be broadly defined as an innovation that has to consider environmental and social issues as well as the needs of future generations. Although sustainable innovation provides considerable new opportunities for companies it goes along with an increased complexity and possible “traps”. This in turn requires certain organizational routines and capabilities to deal with the upcoming challenges. We explore what the specific driving forces are that lead firms to innovate in a sustainable development domain and that lead towards a build-up of sustainable innovation capabilities. We test them empirically for more than 1,100 firms in Germany. We find that firms need to invest in internal absorptive capacities and draw both broadly and deeply from external impulses for innovation. In that sense, investments in employee training are more important than technological R&D expenditures.