Navigating climate change: Climate change awareness and strategies in micro, small, and medium-sized enterprises in a developing economy

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 2 / 26 Introduction Among industrialized economies, around 95 percent of organizations are categorized as Micro, Small, and Medium-Sized Enterprises (MSMEs) [1]. MSMEs are key to economic growth and development, producing more than 50 percent of the total value added and 60 percent of private sector jobs [2]. However, on a global scale, MSMEs contribute significantly to environmental degradation, accounting for approximately 50–60 percent of total carbon emissions worldwide [1,3,4]. Therefore, they highly contribute to the increasing effects of climate change (CC), which is understood as massive large discontinuous changes resulting in alterations in the global average tem- perature, affecting the capacity of natural ecosystems, generating disruptions in precip- itation patterns, and increasing the occurrence of extreme weather events [2,5–7]. As a result, CC introduces uncertainty regarding the availability of production factors (e.g., energy, raw materials, and human capital), and disruptions in the business environment itself, which may impact organizational growth and survival [8–13]. Despite the crucial role of MSMEs in the rising effects of climate change, most research on organizational strategies related to climate change has focused on large corporations. Existing literature has extensively explored how large firms adapt their business operations [14] in response to increasing scrutiny from various stakeholders [15]. Extant research has also examined the organizational determinants of environ-

mental strategies under uncertain conditions [16], the growing trend of disclosure among large firms to comply with evolving standards and regulations [17,18], and their cooperative and innovation-driven initiatives to mitigate environmental impacts and externalities [19]. Additionally, the literature has analyzed how contextual fac- tors—such as normative, market, and social pressures—shape corporate environ- mental behavior, long-term investments, mitigation efforts, and economic outcomes [20–22]. Moreover, previous research has examined how some industries have shifted their processes, adopting cleaner production inputs [23,24]. Nonetheless, little empirical attention thus far has focused on how MSMEs per- ceive and strategize toward CC [25,26]. This gap may be partially explained by the weaker law enforcement regarding MSMEs’ environmental behavior compared to larger organizations, thus limiting available information for large empirical studies among MSMEs. This issue becomes increasingly prominent in developing markets [4,27], where environmental regulations targeting MSMEs are fewer and where official data among MSMEs is even scarcer and harder to find. As a result, research on MSMEs’ environmental practices remains inconclusive, inconsistent, and dis- jointed [3]. To face this concern, a body of literature has emerged in the last couple of years to understand the actions and decisions through which MSMEs develop a sustainability orientation [28,29] and their attitudes and strategic responses toward

CC [30,31]. Overall, there is an increasing interest in understanding how MSMEs perceive CC and how public policies could help MSMEs address this grand global challenge [32]. Following the call toward guiding MSMEs’ actions towards a greener economy [26], this research aims to answer three interrelated questions: (a) To what extent are Funding: The author(s) received no specific funding for this work. Competing interests: The authors have declared that no competing interests exist.