Research questions: What effects can institutional pressures have on firms' sustainable activities? How can firms interact with their stakeholders to overcome the challenge of being sustainable and profitable?  Purpose: As sustainability is on the agenda for institutions worldwide, there is relevance in elevating the understanding of how institutional pressures impact firms' sustainable activities, and what mechanisms that firms can incorporate when developing CSR activities. Thus, we wish to contribute to the strategic benefits of stakeholder interaction to balance profitability and sustainability.  Method: Explorative, qualitative, case study. Conclusion: Institutional pressures have a significant impact on firms’ sustainable activities where the two main drivers are laws and regulations and the market demand. As a result, the main activities that these pressures bring forth include sustainability reporting, certifications, decreasing the carbon footprints, and the delivery of EPDs to the customers. Stakeholder interaction such as communication and collaboration can foster sustainable development and give a deeper understanding of mutually beneficial outcomes that enables firms to balance profitability and sustainability.