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The objective of this study is to examine the role of surface water quality for the decisions by Swedish municipalities to adopt environmental targets and action plans, as well as allocating these decisions to a responsible authority. To this end, we assess how environmental, socioeconomic, and political factors, as well as the availability of environmental expertise, affect these municipal decisions. Questionnaire data from the Swedish Association of Local Authorities and Regions, in combination with environmental monitoring data and official statistics, are used for the econometric analysis. Results show that: (i) municipalities with bad water quality, greater coastal length, and higher income are more inclined to adopt local policies; (ii) collaboration with interest groups increases the likelihood of adopting local policies; and (iii) municipalities with high Center Party representation tend to set responsibility for environmental policy with the municipal council board.