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Amid rising environmental concerns, the nexus between innovation and environmental performance has gained significant attention in both academic and business domains. Recent studies underscore the pivotal role of innovation in addressing environmental challenges. However, a closer examination of empirical evidence reveals a complex relationship. This study aims to explore the connection between business model innovation, corporate environmental sustainability, and leaders’ personal characteristics. By introducing the concept of a mediating effect, we seek to better understand the underlying mechanisms linking innovation to environmental performance, going beyond the organizational traits typically analyzed. To accomplish this, we utilized econometric analysis, specifically employing the ordinary least squares method. Additionally, we developed a composite index to evaluate companies’ levels of environmental sustainability. The dataset for this study comprises responses from 452 valid participants out of the 1,096 Moroccan inter-sectoral companies surveyed in the 2019–2020 World Bank annual business survey. Our research findings suggest that companies with innovative business models demonstrate a greater inclination to address environmental sustainability concerns. Furthermore, leaders’ personal characteristics partially mediate this relationship. This article illuminates the distinct impact of various forms of innovation on environmental performance, with a specific focus on Morocco’s evolving economic context and environmental policy landscape, where environmental engagement remains modest. Moreover, it has the potential to stimulate practical efforts toward the development of national regulations and practices aimed at preserving the environment.