Small and medium enterprises (SMEs) are major contributors in economy as well as employment of emerging markets. These SMEs can be categorized into service or manufacturing based industries. Manufacturing sector in SMEs are now being supported by large enterprises as well as many multi-national corporations for service deposition and their expertise in manufacturing of specialized goods. This is the reason these SMEs are now digitalizing their business models and expanded their market to global level. In this context, large enterprises are also providing Industry 4.0 based solutions to these SMEs to align them with their business models. However, these industries are also realizing the need to reduce environmental impacts of manufacturing by incorporating disruptive technologies i.e., additive manufacturing and IoT in their organizations which comes under Industry 4.0 umbrella. The studies in literature have highlighted the potential benefits of these technologies to improve economic performance but less attention have been paid towards the sustainability performance in terms of environmental and social benefits. To address this issue a theoretical framework for SMEs is proposed which can be used to enhance their environmental performance. The proposed framework is validated in the leading manufacturing SMEs which have incorporated the additive manufacturing operations in their organizations to reduce environmental impacts and improve economic performance. The study also highlights the role of disruptive technologies on the sustainability and discuss how these technologies can improve the economic and environmental performance. The findings indicated that disruptive technologies can improve the environmental performance and create a sustainability roadmap in the initial journey of Industry 4.0 practices for SMEs.