Green entrepreneurial self-efficacy (ESE) refers to individuals’ conviction that they can contribute to solving environmental issues and shows self-assurance in their efforts to protect the environment. The present investigation attempts to determine the role of employees’ green ESE in the green innovation (GI) of SMEs. It is also proposed that GI positively impacts organizational environmental, economic, and social performance. This study also evaluates the mediating role of GI and moderating role of the green knowledge-sharing culture. This study tested the hypothesis using a partial least squares structural equation modeling (PLS-SEM) by applying smart PLS software. A total of 289 employees from SMEs in China were targeted for data collection. The results confirmed that green ESE positively impacts GI. Additionally, the findings verified that GI positively enhances firms’ environmental, economic, and social performance. The results validate the mediating role of GI. The moderating results revealed that green knowledge-sharing culture does not play a moderating role in proposed relationships. This study serves the existing body of literature by providing empirical evidence on the significance of green ESE. The study outcomes highlighted the bridging role of employees’ green ESE for firms’ GI. The results also offer companies a road map for how staff members’ green ESE might help the businesses to improve their performance in terms of the environment, economy, and society.