In recent years green innovation or “eco-innovation” has grown increasingly to become one of the main drivers of economic development. This is a major change with regard to earlier times, when the environment in general was considered as a burden for businesses. This paper presents an empirical and theoretical analysis of the dynamics of the “greening” of industry in an effort to learn more about the competitive conditions for eco-innovation against a background of continuous change and in various economic contexts. We study the case of the corporate strategies of firms involved in the chain of production of paper in Denmark in regard to environment-related nanotechnology, using an “evolutionary capabilities” approach. Nanotechnology is of interest because it is at the early stages of development, because of its envisaged environmental potential and because of the environmental risks associated with it. It is also an example of the most high-tech side of eco-innovation and therefore of the absorption capacity of the construction sector.