["Business Strategy and the Environment, EarlyView. ", "\nABSTRACT\nDrawing on the natural‐resource‐based view and signaling theory, we examine how environmental sustainability practices in retail translate into market outcomes through product responsibility. We use a CRE/Mundlak framework to distinguish within‐firm changes from between‐firm structural differences. The results show that resource use, emissions management, and green innovation are consistently associated with product responsibility, whereas their direct links to revenue growth and ESG‐related corporate reputation are limited. Mediation analyses indicate that indirect pathways through product responsibility are concentrated at the between‐firm level and are negative, especially with regard to revenue growth. Product responsibility is also negatively associated with both outcomes at the between‐firm level, suggesting that responsibility signals enhance visibility and credibility while also creating cost pressures, stakeholder scrutiny, and reputational risks. Moderation tests provide limited support for firm size and multinational operations, although conditional effects reveal firm heterogeneity. We contribute by identifying product responsibility as a translation mechanism that links internal environmental capabilities with externally observable market signals.\n"]