Purpose Many industries accomplish green innovation for sustainable development, but it should play a significant role in the sustainable development and implementation of an organizations benefit. The purpose of this paper is to examine if green business innovation in terms of technology, organization, stakeholder and policies is able to develop competitive advantages. Design/methodology/approach This study was carried out in two stages and covered 4 variables and 21 indicators. Based on the experts’ opinions and literature review, a self-administered questionnaire was distributed among 113 experts of oil refining companies in Iran. The data were analyzed by the structural equation modeling technique. Findings The results indicated the effects of organizational factors, legislation, regulations and technology on green innovation. They also revealed the role of green innovation in reaching competitive advantages. Moreover, the relationship between stakeholder and green innovation was investigated. Practical implications The findings provide guidance on how firms can be better prepared for green innovation and get the most out of it and deal with the risks involved in green innovation, it is important that companies evaluate organization, technology and environment readiness and formulate corresponding strategies. Such a proactive approach can help enterprise control and minimize the risks of green innovation. A self-evaluation of the green innovation readiness of an enterprise helps the enterprise establish a mechanism to keep track of technological evolution. Originality/value This study contributes to the emerging field of green innovation which embed organization, technology, stakeholders, legislation and flows of the value created, delivered and captured in a value network. It also highlights the gaps in addressing the challenges of an innovative model for competitive advantages and suggests avenues for future research.