Firms face a variety of stakeholder pressures to improve their environmental performance. A firm's perceptions of these pressures can radically affect its strategic reactions and subsequent resource allocation decisions. Previous studies do not explain how perceived operational impacts may influence a firm's investment in environmental technologies. This study examines the relationship between perceived impacts on process and product and carbon preventive projects within firms' environmental technology portfolio. Using carbon emissions and carbon disclosure data, we find that higher perceived process‐related impacts are associated with a higher proportion of carbon preventive projects, while perceived product‐related impacts have the opposite effect. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment