Environmental collaboration means the direct involvement of supply chain partners in jointly planning for environmental objectives (Vachon & Klassen, 2008). Addressing the environmental issues faced in the supply chain requires a network relational perspective that considers the diverse resources, capabilities and knowledge that already exist in the supply chain (Sheth & Parvatiyar, 2020). The supply chain literature identifies environmental collaboration as the fundamental process used to attain a green, sustainable supply chain and a circular economy (Dora, 2019). Nevertheless the literature calls for further exploration of the precursors, components and processes of environmental collaboration as it occurs as an extension of existing operational collaborations in a network of partnerships (Ahmed et al., 2020). The theoretical contribution of this research is in two folds, firstly this research identifies the point at which existing the operational collaboration extends to environmental collaboration (Hazen, Russo, Confente, & Pellathy, 2020). Secondly, the resources, capabilities, and roles of the supply network as precursors and components needed during environmental collaborations emerged. Finally, the methodological contribution of this research is to explores environmental collaboration from a myriad of perspectives, rather than being bound by a focal organisation’s experiences, resources, and capabilities. In which this research responds to the call in the available literature to further explore relational environmental collaboration through a qualitative lens (Ren et al., 2019). The selection of participants was based on the assumptions that first, the organisations that were proactively collaborating on environmental objectives were interviewed to understand the circumstances in which environmental collaboration has been adopted. Secondly, the partner’s coordination and roles throughout environmental collaboration in the supply chain are explored. Finally, the relational qualities that influence the momentum of environmental collaboration throughout the network is explored. The theoretical underpinning of this research includes the Natural Resource Based View (Hart, 1995) and Interorganisational Relational View Theory (Dyer & Singh, 1998; Oliver, 1997). Both theories inform the relational investments, resources and capabilities needed for environmental collaboration in a network context to attain a competitive advantage. This research adopts a qualitative and grounded theory research methodology design through a pragmatism theoretical philosophical lens. The pragmatic approach aids in exploring the undermining consequences, conditions, processes, and outcomes of environmental collaboration throughout the supply chain network. The themes that emerged through inductive thematic analysis and cross comparison from 21 semi structured interviews is comprised of retailers, manufacturers, suppliers, logistics staff and associations in the furniture Industry in Australia and New Zealand. The precursors of environmental collaboration emerged as Green Organisational Orientation. The themes of a Green Organisational Orientation are having a green conscious leadership, forming a green organisation, and assessing plausible green practices. The components of environmental collaboration emerged as supply chain and industry level collaboration. The theme of supply chain environmental collaboration that is supported by the sub-themes of restructuring the supply network, coordinating environmental collaboration, and defining partner roles. Industrial environmental collaboration is supported by the sub-themes of environmental competition and the association’s role in the wider industry. The relational factors that strengthen the environmental collaboration was supported by themes including establishing green supply alignments, exploring dynamic power asymmetries in the supply network, trust in the green supply alignments, communicating in a green supply network, transparency in sharing green resources and capabilities and authenticity in green supply alignments. The theoretical model built demonstrates the evolution of environmental collaboration as a non-linear process that is propelled by the Green Organisational Orientation towards supply chain and industry environmental collaboration. The relational factors strengthen the collaborative process within the supply network. But the environmental collaboration is further strengthened in terms of sustainable development through time.