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 20 / 26 heterogeneity aligns with ABV’s assertion that organizational attention is constrained by cognitive limits and contextual drivers, influencing which sustainability strategies are perceived as viable. A key implication of our study is the role of sector-based heterogeneity in shaping firms’ attention to sustainability. While some sectors demonstrate greater alignment with sustainability practices, others exhibit weaker engagement, likely due to differences in operational needs, regulatory pressures, and market incentives. This finding highlights the need for more targeted theoretical frameworks that account for sector-specific variations in how organizations interpret and respond to climate-related issues. Future research should explore how different industry dynamics influence firms’ prioritization of CC and sustainability, thereby expanding ABV’s applicability to sectoral decision-making. Our results also highlight the impact of internal organizational factors on sustainability attention. MSMEs experiencing stronger internal institutional pressures—such as shifts in production processes—appear more inclined to incorporate sustainability into their strategic priorities. This suggests that firms’ internal structures, governance models, and decision-making processes play a cru- cial role in determining how sustainability is framed within their strategic agenda. Specifically, our findings support recent

empirical work that links gender-balanced governance structures with greater environmental engagement. From an ABV perspective, this implies that governance composition may act as a filter through which sustainability pressures are pro- cessed and prioritized. Future studies could extend this analysis by investigating how internal leadership structures shape firms’ cognitive processing of ecological pressures. Additionally, our findings underscore the absence of standardized global guidelines for establishing net-zero strategies, which hinders MSMEs from effectively translating environmental awareness into actionable sustainability practices. This lack of clear directives reinforces ABV’s premise that firms selectively process external pressures, focusing on those that offer clearer strategic pathways. Without well-defined institutional frameworks guiding carbon neutrality efforts, MSMEs may strug- gle to allocate attention to sustainability in a meaningful way. Theoretical extensions of ABV could explore how the presence (or absence) of institutional clarity affects firms’ ability to navigate complex sustainability landscapes. Finally, while our study primarily employs a macro-level perspective of ABV, we acknowledge the critical role of micro-level decision-making dynam- ics. Prior research suggests that managerial cognition, risk perception, and leadership orientations significantly influence which issues gain organizational attention. Our findings suggest that MSMEs’ engagement with CC is not only a function

of external pressures but also of internal managerial beliefs and resource availability. Future research could extend ABV by examining how micro-level cognitive frames interact with macro-level pressures to shape strategic sustainability decisions. By integrating these insights, scholars could develop a more comprehensive understanding of how MSMEs navigate envi- ronmental uncertainty and embed sustainability within their long-term strategic planning. Public policy implications Our findings highlight critical disparities in MSMEs’ awareness and strategic engagement with CC and decarbonization, underscoring the need for targeted policy interventions. Given the heterogeneous levels of knowledge and engagement across economic sectors, broad policy initiatives should be complemented by industry-specific measures that address distinct challenges faced by MSMEs. While MSMEs generally recognize broad CC-related concepts, their understanding of technical terms such as carbon neutrality and decarbonization remains limited. For example, we found particularly pro- nounced knowledge gaps in service-oriented industries. This knowledge gap impedes their ability to implement effective sustainability strategies. As such, public policies should prioritize tailored training and educational programs that reflect sectoral needs, providing industry-specific guidance on sustainability strategies. Outreach programs should translate complex CC concepts into actionable insights using accessible language, real-world case studies, and digital training

modules. Additionally, governments should mandate sustainability literacy programs as part of business licensing and certification processes, ensuring that MSMEs integrate environmental considerations into their strategic planning from inception. Furthermore, public awareness campaigns should highlight successful MSMEs implementing CC practices, using case studies, awards, and certification programs to incentivize broader participation. Overall, given the sectoral