Recently, the trend toward sustainable development has led to different categories of sustainability‐oriented innovations (SOIs). Even though each SOI category could play an important role in enhancing sustainability performance (SP), which covers economic, environmental, and social dimensions, developing SOIs is a difficult task for small and medium enterprises (SMEs) as they have limited resources and expertise. From the sustainable supply chain management perspective, the practices of socially responsible supplier development (SRSD) by buying firms may help strengthen the SOIs in which their SME suppliers engage, thus contributing to improving SMEs' SP. Therefore, this study created a multidimensional research framework that links buying firms' SRSD with SME suppliers' SOIs and investigated the influence of SRSD and SOIs on SP. The empirical results show that SRSD practices significantly and positively affect SOIs, with SOIs helping to improve SP and fully mediating the relationship between SRSD and SP. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment