Small and Medium Enterprises (SMEs) are recognized as the main drivers of economic growth and development in many countries throughout the world. SMEs represent about 90% of the manufacturing sector and contribute about 14% of the total manufacturing contribution to GDP. Despite SMEs’ potential to change Nigeria’s status from a consumer economy to a production economy, policies that will ensure that environmentally- friendly manufacturing processes and production technology are not implemented or complied with. SMEs’ operational activities may be deleterious to human health and the ecosystem if environmental management practices are not adopted or prioritized. This paper evaluated the perception and adoption of the Environmental Management System, mainly ISO 14001, by SMEs in Nigeria. One hundred and fifty (150) SMEs in the manufacturing sector in Lagos and Ogun State, Southwestern Nigeria, were randomly selected for this study. The paper posits that environmental management literacy and advocacy should be carried out in SMEs. Environmental management practices involve engaging both industries and product end-users in sustainable practices. The paper concludes that the implementation of environmental management practices and culture by SMEs will abate environmental pollution and its concomitant health risks to humans, the environment, flora, and fauna. Mandatory and voluntary environmental measures are suggested as a means of engendering eco-friendly innovation for sustainable development, triggering employment, job security, and gross domestic product.