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 21 / 26 differences in CC awareness and response strategies, policy frameworks should be adaptable to specific industry needs. For instance, MSMEs in agriculture and mining may require immediate climate adaptation strategies due to direct expo- sure to environmental risks, while manufacturing and service-based ventures may benefit more from structured long-term incentives for integrating sustainability into operations. Our findings suggest that firms engaged in carbon-related initiatives are more likely to incorporate carbon neutrality into their strategic planning. However, many MSMEs lack the internal resources and expertise to develop comprehensive CC strategies. To bridge this gap, policymakers should foster inter-organizational collaboration through public-private part- nerships, industry consortia, and government-led initiatives that connect MSMEs with larger firms, research institutions, and international sustainability programs. Sector-based collaborations, such as industry associations and chambers of commerce, should receive policy support to provide MSMEs with tailored assistance, including energy audits, operational efficiency upgrades, and sustainability-focused training programs. Institutionalizing these partnerships through formal agreements would ensure sustained engagement and long-term capacity-building efforts. In this same spirit, local govern- ments could adopt a “street-level bureaucracy” approach, engaging MSMEs through advisory programs and accessible

workshops to help businesses navigate CC regulations. Furthermore, the absence of standardized global guidelines for net-zero strategies creates uncertainty for MSMEs seeking to implement sustainability measures. Indeed, our findings reveal substantial variation in carbon neutrality strategies, further emphasizing the need for clear policy directives. Therefore, governments should develop sector-specific roadmaps outlining best practices, regulatory expectations, and achievable carbon reduction targets tailored to different industries. Regulatory clarity would help MSMEs navigate the com- plexities of sustainability transitions and align their strategies with broader national and international climate objectives. Financial constraints also remain a significant barrier to MSMEs’ adoption of sustainability strategies. Our findings indi- cate that ventures with capital constraints are less likely to actively pursue carbon neutrality. To address this, policymakers should expand access to green financing mechanisms, including low-interest loans, grants, and subsidies for energy- efficient technologies. Additionally, tax incentives should be introduced for investments in renewable energy adoption, low-emission supply chain improvements, and carbon neutrality initiatives. Establishing national green credit lines tailored to MSMEs could provide financial support without jeopardizing operational stability. Linking financial incentives to local green certifications could further encourage participation by offering reputational advantages alongside financial benefits.

Overall, ensuring long-term funding and consistent monitoring mechanisms could be crucial to supporting MSMEs in pro- gressively developing their environmental capabilities without facing abrupt financial burdens. Practical implications To translate climate awareness into actionable strategies, MSMEs require industry-specific guidance that aligns with their operational realities. Our study underscores the uneven distribution of climate-related knowledge across sectors, which requires practical solutions tailored to business size, sector, and available resources. Indeed, MSMEs across different sectors exhibit varied levels of strategic CC awareness, with many focusing on corporate-level sustainability initiatives rather than operational process improvements. To face this concern, business associations could develop toolkits outlining industry-specific steps for assessing carbon footprints and implementing sustainable practices. For example, agricultural MSMEs could receive guidance on climate-resilient farming techniques, while manufacturing firms could focus on energy efficiency and waste reduction strategies. Retail and service-based businesses, which often lack clear decarbonization roadmaps, could be provided with practical frameworks for integrating sustainability into supply chains and customer engagement strategies. Our findings also indicate that firms engaged in carbon-related initiatives are more likely to perceive carbon neutrality as an achievable goal. MSMEs should explore opportunities in voluntary carbon markets, sustainability certification pro-

grams, and cooperative purchasing agreements for green technologies. Governments and industry associations should provide MSMEs with training on the financial benefits of carbon market participation, enabling them to capitalize on new