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

Not in the company’s interest 22.22 15.29 14.29 15.35 Do not see it feasible 11.11 18.24 12.05 14.42 Don’t know 16.67 11.18 9.82 10.93 Grand Total 100 100 100 100 Panel D. Tertiary sector (N = 934) Strategic Timing SE SBO MSMEs Grand Total Period less than or equal to 5 years 27.62 32.59 42.03 34.26 From 6 to 10 years 11.90 19.20 20.29 17.88 11 to 20 years 8.10 4.46 4.35 5.25 More than 20 years 2.38 3.35 0.72 2.36 Not in the company’s interest 20.00 15.85 15.58 16.70 Do not see it feasible 19.05 14.06 5.80 12.74 Don’t know 10.95 10.49 11.23 10.81 Grand Total 100 100 100 100 Note. Values in percentages. SBO = Small Business Owners; SE = Self-Employed; MSMEs = Micro, Small, and Medium-sized Enterprises. https://doi.org/10.1371/journal.pone.0327165.t005

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 15 / 26 Furthermore, we remark that a significant proportion of firms in the secondary and tertiary sectors believe that carbon neutrality is either not of interest to them or not feasible to achieve (Mean Secondary Sector = 0.31; Mean Tertiary Sector = 0.30) . This proportion is larger than in the primary sector (Mean Primary Sector = 0.18), suggesting that most MSMEs do not see a direct benefit in pursuing non-financial strategies like carbon neutrality. More so, results show that MSMEs from the secondary sector exhibit a lower awareness regarding strategic timing for achiev- ing carbon neutrality (Mean Secondary Sector = 0.13), in contrast to MSMEs from other economic sectors (Mean Primary Sector = 0.05; Mean Tertiary Sector = 0.11). This overall trend may suggest that ventures across different eco- nomic sectors lack specific knowledge about strategic planning on sustainability matters. To further explore our initial find- ings, we conducted a Logistic regression analysis focusing on two interrelated outcomes: (a) the perception that carbon neutrality is achievable within a five-year timeframe (Model ‘a’), and (b) the view that carbon neutrality is either unattain- able or not a current strategic priority (Model ‘b’). S1 and S2 Tables present the univariable and bivariate analyses of the variables, indicating no evidence of multicollinearity and suggesting independence between observations. These findings support the core assumptions of the model.

Table 6 presents the odds ratios (OR) and marginal effects (ME) derived from this analysis. The results in Model ‘a’ highlight key factors influencing short-term carbon neutrality perceptions. Notably, endorsing gender-balanced leadership did not have a statistically significant effect on perceiving carbon neutrality as achievable within five years (OR = 1.01; ME = 0.00; p = 0.96), suggesting that other factors might play a more decisive role in shap- ing organizational attention toward this strategy. Additionally, capital barriers exhibited a positive but non-significant effect (OR = 1.20; ME = 0.03; p = 0.15), while technology barriers showed a negative yet non-significant effect (OR = 0.88; ME = –0.03; p = 0.34). These findings suggest that ventures’ decisions to engage in long-term climate- related strategies may be driven more by managerial choices than by the availability of specific resources. Furthermore, ventures perceiving greater investor pressure to pursue carbon neutrality were significantly more likely to consider this goal feasible (OR = 1.50; ME = 0.09; p = 0.01). In contrast, the perceived support from the government (OR = 2.87; ME = 0.23; p = 0.30) and customer pressures (OR = 1.25; ME = 0.05; p = 0.17) had positive but non-significant effects. Similarly, perceived support from stakeholders, such as employees, had a neg- ative but non-significant effect (OR = 0.33; ME = –0.25; p = 0.34). Moreover, ventures with greater awareness of domestic carbon markets (OR = 1.33; ME = 0.06; p = 0.03) and those already implementing carbon management

barriers reduce the likelihood of considering carbon neutrality as infeasible or excluding it from strategic planning. This finding suggests that MSMEs may perceive environmental value creation as a potential driver of growth. It is plausible that having sufficient internal resources increases the likelihood of integrating carbon neutrality into strategic planning. Further

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 16 / 26 Table 6. Carbon Neutrality Strategic Timing. Panel 1. Model ‘a’ Estimates Delta-Method OR SD P-value 95% CI ME SD P-value 95% CI Gender-balanced leadership 1.01 0.13 0.96 0.79 1.29 0.00 0.03 0.96 -0.05 0.06 Capital barriers 1.20 0.15 0.15 0.94 1.53 0.04 0.03 0.15 -0.01 0.09 Technology barriers 0.88 0.12 0.34 0.67 1.14 -0.03 0.03 0.34 -0.09 0.03 Government support 2.87 2.92 0.30 0.39 21.07 0.23 0.22 0.30 -0.21 0.67 Stakeholder support 0.33 0.38 0.34 0.03 3.18 -0.25 0.26 0.34 -0.75 0.25 Customer pressures 1.25 0.20 0.17 0.91 1.70 0.05 0.04 0.17 -0.02 0.12 Investor pressures 1.50 0.24 0.01 ** 1.10 2.06 0.09 0.04 0.01 ** 0.02 0.16 Awareness of carbon markets 1.33 0.17 0.03 ** 1.03 1.72 0.06 0.03 0.03 ** 0.01 0.12 Carbon-related practices 1.22 0.22 0.27 0.86 1.72 0.04 0.04 0.27 -0.03 0.12 Carbon programs 1.49 0.20 0.00 *** 1.14 1.94 0.09 0.03 0.00 *** 0.03 0.15 Economic Sector Secondary Sector 0.40 0.10 0.00 *** 0.25 0.65 -0.21 0.06 0.00 *** -0.32 -0.09 Tertiary Sector 0.59 0.14 0.02 ** 0.37 0.93 -0.13 0.06 0.03 ** -0.24 -0.01 Business Community Small business owner 1.20 0.21 0.28 0.86 1.69 0.04 0.04 0.27 -0.03 0.11 MSMEs 1.55 0.29 0.02 ** 1.08 2.23 0.10 0.04 0.01 ** 0.02 0.17 Constant 0.35 0.10 0.00 *** 0.20 0.63 Observations 1453.00 Pseudo R square 0.04 Panel 2. Model ‘b’ Estimates Delta-Method

OR SD P-value 95% CI ME SD P-value 95% CI Gender-balanced leadership 0.70 0.09 0.01 ** 0.54 0.90 -0.08 0.03 0.01 ** -0.14 -0.03 Capital barriers 0.66 0.08 0.00 *** 0.52 0.83 -0.10 0.03 0.00 *** -0.15 -0.04 Technology barriers 0.91 0.12 0.47 0.70 1.18 -0.02 0.03 0.47 -0.08 0.04 Government support 1.12 1.14 0.92 0.15 8.30 0.03 0.24 0.92 -0.45 0.50 Stakeholder support 1.56 1.39 0.61 0.27 8.91 0.11 0.21 0.61 -0.31 0.52 Customer pressures 0.65 0.10 0.00 *** 0.49 0.88 -0.10 0.04 0.00 *** -0.17 -0.03 Investor pressures 0.65 0.10 0.01 ** 0.49 0.88 -0.10 0.04 0.01 ** -0.17 -0.03 Awareness of carbon markets 0.67 0.09 0.00 *** 0.51 0.87 -0.10 0.03 0.00 *** -0.16 -0.03 Carbon-related practices 0.49 0.10 0.00 *** 0.33 0.74 -0.17 0.05 0.00 *** -0.26 -0.07 Carbon programs 0.64 0.09 0.00 *** 0.48 0.85 -0.10 0.03 0.00 *** -0.17 -0.04 Economic Sector Secondary Sector 1.99 0.57 0.02 ** 1.13 3.48 0.15 0.06 0.01 ** 0.04 0.27 Tertiary Sector 1.65 0.46 0.07 * 0.96 2.84 0.11 0.06 0.05 * 0.00 0.22 Business Community Small business owner 0.83 0.13 0.25 0.60 1.14 -0.05 0.04 0.25 -0.12 0.03 MSMEs 0.67 0.12 0.02 ** 0.47 0.94 -0.10 0.04 0.02 ** -0.18 -0.01 Constant 1.64 0.52 0.12 0.89 3.05 Observations 1453.00 Pseudo R square 0.07 Note. The table presents estimates and marginal effects from a logit model assessing the relevance of firms’ efforts to achieve carbon neutrality. Model

‘a’´ examines whether the firm perceives achieving carbon neutrality within less than five years as feasible. Model ‘b’ examines whether the firm con- siders carbon neutrality infeasible or does not include it in its strategic plan. OR = Odds Ratios; SD = Robust Standard Errors; CI = Confidence Intervals. ***p-value < 0.001; ** p-value < 0.05; * p-value < 0.10. https://doi.org/10.1371/journal.pone.0327165.t006

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 17 / 26 research is needed to determine the specific resources required to facilitate this integration. Additionally, ventures perceiv- ing pressures from customers (OD = 0.65; ME = –0.10; p = 0.00) and investors (OD = 0.67; ME = –0.10; p = 0.01) are less likely to disregard climate-related strategies. In contrast, perceived support from the government (OD = 1.12; ME = 0.03; p = 0.92) and stakeholders, such as employees, (OD = 1.56; ME = 0.11; p = 0.61) exhibit a positive but non-statistically significant effect. These findings suggest that perceived normative discourses might play a critical role in shaping the strategic decisions of MSMEs regarding climate action. Finally, awareness of national carbon markets reduces the likelihood of perceiving carbon neutrality as unfeasi- ble (OD = 0.67; ME = –0.10; p = 0.00), suggesting that familiarity with these markets positively influences strate- gic alignment with sustainability goals. At the corporate level, ventures actively engaged in carbon-related practices (OD = 0.49; ME = –0.17; p = 0.00) or implementing carbon programs (OD = 0.64; ME = –0.10; p = 0.00) are similarly less likely to view carbon neutrality as unattainable, highlighting a potential learning effect associated with sustainability initiatives. Conversely, ventures in the secondary (OD = 1.99; ME = 0.15; p = 0.01) and tertiary (OD = 1.65; ME = 0.11; p = 0.05) sectors are more inclined to perceive carbon neutrality as less feasible, potentially

due to sector-specific constraints. Lastly, MSMEs demonstrate a lower likelihood of dismissing carbon neutrality as a stra- tegic option (OD = 0.67; ME = –0.10; p = 0.02), suggesting that they may view sustainability commitments as essential for long-term survival. Carbon neutrality: Strategic awareness At last, we explored MSMEs’ strategic awareness regarding carbon neutrality (please refer to Table 7 for an overview). Specifically, MSMEs aim to implement carbon neutrality strategies at either the corporate practice or operational process level to achieve their strategic timing. Panel A outlines the overall trend observed within the sample. This trend reveals most respondents (Mean All = 0.41) intend to implement strategies at the operational process level, while a smaller propor- tion anticipates implementing strategies at the corporate practice level (Mean All = 0.14). Remarkably, a significant pro- portion of participants did not respond (Mean All = 0.45), indicating a potential lack of understanding on how to effectively pursue carbon neutrality. To further explore this result, we conducted a Pearson chi-square (X2) test of homogeneity which suggests that the sample behaves in an heterogenous way (X2 = 115.94; p = 0.00) further confirming the heterogeneity on strategic planning within the business community. These findings provide further evidence of the absence of standard- ized global guidelines for establishing net-zero strategies [64]. This lack of clear pathways for selecting carbon neutrality

strategies hinders executives from effectively driving environmentally positive organizations. While some conceptual studies have attempted to address this gap, further research is needed to develop clearer and more actionable guidelines for the business community. Likewise, panels B, C, and D in Table 7 describe the strategic awareness among MSMEs by eco- nomic sector. It is observed that ventures in the primary sector (Mean Primary Sector = 0.54)are more inclined to engage in strategies at the operational process level compared to those from other economic sectors (Mean Secondary Sector = 0.41; Mean Tertiary Sector = 0.41). This trend may suggest that certain sectors find it easier to integrate operational-level strategies into their approach to achieving carbon neutrality, due to their operational nature. Besides, we observe that ventures in the primary sector (Mean Primary Sector = 0.18) and tertiary sector (Mean Tertiary Sector = 0.18)are more likely to engage in corporate practices level compared to the secondary sector (Mean Secondary Sector = 0.14). This observation could imply that ventures from the secondary sector may need to engage in long-term planning to balance financial and non-financial strategies effectively. Finally, we found that ventures from the secondary (Mean Secondary Sector = 0.47) and tertiary sector (Mean Tertiary Sector = 0.45) had the highest proportion of no response about carbon neutrality strategies compared to the primary sector (Mean Primary Sector = 0.28). This may suggest that some economic sectors may lack knowledge about

the concept of “Carbon Neutrality” and how to strategize and potentially implement it effectively. These findings are

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 18 / 26 further validated by the Pearson chi-square (X2) test of homogeneity, which demonstrates statistically significant het- erogeneity in strategic awareness across sectors. Specifically, firms in the primary (X2 = 54.32; p = 0.00), secondary (X2 = 57.29; p = 0.00), and tertiary (X2 = 80.49; p = 0.00)sectors exhibit distinct behaviors in their approach to strategic awareness. This sector-based heterogeneity suggests that sector-specific characteristics influence how organizations prioritize and integrate sustainability and carbon neutrality within their strategic frameworks. These findings align with pre- vious research [64,65], highlighting the need for tailored approaches that consider sectoral differences. Discussion Given the relevance of guiding MSMEs toward a greener economy, we aimed to answer three interrelated research ques- tions: a) To what extent are MSMEs aware of CC and decarbonization? (b) How do MSMEs develop strategies to address CC and achieve carbon neutrality? (c) What factors shape MSMEs’ attention to CC and decarbonization? Table 8 pres- ents a comparative summary of our main findings alongside those reported in prior empirical studies. It highlights areas of consistency, divergence, and potential contributions to ongoing scholarly debates. Our findings indicate that while MSMEs are generally familiar with broad concepts such as “climate change” and “global warming,” their understanding of more

specific terms like “carbon neutrality” and “decarbonization” remains limited. Additionally, we observed significant dispar- ities in climate-related knowledge across the business community, which may impact strategic decision-making. Further- more, MSMEs perceive higher internal perceived institutional pressures (PIP) than external PIP, suggesting that shifts Table 7. Carbon Neutral: Strategies. Panel A. All sample (N = 1,453) Strategic Awareness SE SBO MSMEs Grand Total At the level of operational processes 48.28 41.67 33.46 42.74 At the level of corporate practices 12.16 14.35 14.96 13.63 No response 39.56 43.98 51.57 43.63 Total 100 100 100 100 Panel B. Primary sector (N = 89) Strategic Awareness SE SBO MSMEs Grand Total At the level of operational processes 52.94 46.67 62.50 51.69 At the level of corporate practices 13.73 26.67 12.50 17.98 No response 33.33 26.67 25.00 30.34 Total 100 100 100 100 Panel C. Secondary sector (N = 430) Strategic Awareness SE SBO MSMEs Grand Total At the level of operational processes 46.43 37.65 38.89 42.33 At the level of corporate practices 12.50 14.12 8.33 12.79 No response 41.07 48.24 52.78 44.88 Total 100 100 100 100 Panel D. Tertiary sector (N = 934) Strategic Awareness SE SBO MSMEs Grand Total At the level of operational processes 48.91 42.86 31.43 42.08 At the level of corporate practices 11.59 13.62 16.19 13.60 No response 39.49 43.53 52.38 44.33 Total 100 100 100 100

Note. Values in percentages. SBO = Small Business Owners; SE = Self-Employed; MSMEs = Micro, Small, and Medium-sized Enterprises. https://doi.org/10.1371/journal.pone.0327165.t007

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 19 / 26 in production and operational processes may influence how these organizations create value. Across economic sectors, most ventures showed greater awareness of strategies at the corporate practice level than at the operational process level. Our analysis also revealed substantial heterogeneity in strategic timing for achieving carbon neutrality, though we observed notable homogeneity in timing within the primary and secondary sectors. Investor pressures, awareness of car- bon markets, and participation in carbon programs were linked to a greater likelihood of firms perceiving carbon neutrality as achievable within five years. Conversely, MSMEs with gender-balanced governance, capital constraints, and external pressures from customers and investors—along with engagement in carbon-related initiatives—were less likely to dismiss carbon neutrality or exclude it from their strategic planning. In addition, our findings highlight significant variation in carbon neutrality strategies among MSMEs, pointing to a lack of clear guidelines on how to effectively implement such strategies. Based on these insights, we now present the theoretical implications, and public policy and practical recommendations derived from this project. Theoretical implications Our study contributes to the ABV approach by illustrating how MSMEs’ responses to climate CC are shaped by their contextual environment, particularly ecological pressures and normative discourses. ABV posits that firms allocate their

attention to issues they perceive as most pressing, which, in the case of MSMEs, is influenced by sectoral character- istics, resource availability, and the salience of sustainability-related pressures. Our study reveals that while MSMEs generally recognize broad climate-related concepts, their understanding of more technical terms like carbon neutrality and decarbonization is limited. This suggests that MSMEs’ strategic attention is unevenly distributed across the business community, with some firms prioritizing CC adaptation while others focus on short-term financial concerns. The observed Table 8. Comparison of Results with Prior Empirical Research. Extant Literature Key insights As suggested by [32], scientific knowledge often diverges from public understanding, highlighting the need for targeted educational programs specifically designed for the MSME population. MSMEs only possess a basic understanding of CC, while more special- ized or advanced aspects of the topic remain largely unfamiliar to them (i.e., in line with previous literature). As noted by [33], firms with limited human and financial resources tend to be more vulnerable to climate risks, which leads them to perceive a greater internal impact. Ventures perceive climate risk in diverse ways, influenced by internal characteristics such as firm size and stage of development (i.e., supports previous literature). As previous research suggests [26], organizational objectives may often be misaligned with climate-related outcomes due to existing knowledge gaps concerning their environmental impacts.

Ventures across economic sectors exhibit varying levels of strategic climate change (CC) awareness, with firms in the primary sector demon- strating a higher awareness of corporate sustainability strategies (i.e., as stated in previous research). Previous studies (e.g., [37]; [35]) suggest that external pressures often serve as catalysts for the adoption of proactive sustainability strategies. Ventures tend to adopt more proactive carbon neutrality strategies when they perceive strong external pressures, such as those exerted by inves- tors (i.e., as shown in previous studies). Empirical evidence [25] suggests that customer pressure serves as a driver of proactive environmental practices. Our results indicate a positive, albeit statistically non-significant, effect of customer pressure on firms’ short-term strategic timing for achieving car- bon neutrality. This outcome may be explained by the influence of other stakeholders, such as investors, who may play a more prominent role in shaping strategic environmental decisions within this contextual setting (i.e., in contrast to previous literature). Evidence suggests [34] that internal environmental policies and practices are related to environmental performance Our regression analysis provides mixed positive evidence on the influence of internal carbon-related practices and programs in shaping short-term strategic timing for achieving carbon neutrality (i.e., to an extent, similar to previous research). https://doi.org/10.1371/journal.pone.0327165.t008

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

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

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 22 / 26 revenue streams linked to carbon credits and emissions reductions. Even though many MSMEs perceive environmental value creation as a potential driver of growth, integrating CC strategies into core business functions remains a challenge. To address this, businesses should conduct environmental risk assessments to evaluate their exposure to climate-related disruptions. By incorporating climate considerations into site location decisions, capital allocation, labor management, and supply chain planning, MSMEs could proactively develop resilience against future sustainability challenges. As we have shown, many MSMEs lack the internal expertise needed for effective environmental management. To over- come this challenge, industry associations and chambers of commerce should facilitate collective climate initiatives, such as cooperative sustainability programs, shared infrastructure for green technologies, and joint procurement of renewable energy solutions. Establishing knowledge-sharing networks among MSMEs could help smaller firms access sustainability resources at reduced costs while collectively enhancing their market competitiveness. Additionally, MSMEs should take advantage of available government programs, grants, and advisory services aimed at supporting sustainability transitions. By staying informed about regulatory changes and actively participating in policy discussions, businesses could better

anticipate and adapt to evolving environmental requirements. Finally, forming partnerships with larger firms and research institutions could provide MSMEs with access to technical expertise, funding opportunities, and innovative sustainability solutions. Overall, by strengthening these practical support mechanisms, MSMEs could move beyond general climate awareness and adopt tangible, sector-specific strategies that contribute to long-term environmental sustainability and business resilience. Limitations This project is not without limitations. A primary concern is the potential for response bias, as the data relies on self- reported perceptions and strategies from MSME C-level executives. This may lead to an overestimation or underestima- tion of their awareness and engagement with CC issues. Future research could incorporate qualitative approaches to explore the micro-foundations of CC-related decision-making. Complementary research designs may also help identify additional factors influencing MSMEs’ awareness and engagement with sustainability initiatives. Additionally, the study’s reliance on survey methods may not fully capture the nuanced understanding and complex mechanisms involved in how MSMEs address climate change. This approach could overlook the significant influence of external factors, such as gov- ernment policies, market dynamics, and technological advancements, which are crucial in shaping MSMEs’ environmental awareness, behaviors, and strategies. Future research should adopt a more comprehensive approach that examines

both internal and external drivers, offering deeper insights into how these factors collectively shape MSMEs’ responses to climate change. Second, although the sample is representative of MSMEs in Colombia—a country within Latin America, a region often regarded as fertile ground for theory building and testing [47]—our findings are limited to contexts that share similar institutional environments and experience varying degrees of CC impact. This limitation affects the generalizability of the results, highlighting the need for further research in diverse settings to empirically validate our conclusions. Third, the study’s cross-sectional design presents another limitation, as it captures MSMEs’ perceptions and strategies at a single point in time. Consequently, this approach does not account for temporal changes or the evolution of attitudes and CC-related practices. To address this, future research should incorporate longitudinal studies to examine how MSMEs’ awareness and strategies develop over time. Fourth, this study does not fully capture the complexity and diversity of CC impacts and responses. While it focuses on key themes such as awareness, risk perceptions, and strategic planning, other critical aspects—such as supply chain vul- nerabilities, stakeholder engagement, and the socio-economic implications of CC strategies—may have been overlooked. Future research should explore these dimensions to provide a more comprehensive understanding of MSMEs’ engage-

ment with CC-related challenges. Fifth, while this study aimed to identify general patterns within the business community regarding climate change awareness and related strategies, the use of anonymized data limited our ability to examine

PLOS One | https://doi.org/10.1371/journal.pone.0327165 July 2, 2025 23 / 26 the decision-making processes through which firms select and implement specific climate change strategies and pursue carbon neutrality goals. Future research could address this gap by conducting case-based analyses of ventures success- fully implementing carbon reduction initiatives and climate-related plans and programs. Such an approach could help identify commonalities and best practices across economic sectors, informing the development of more effective corporate sustainability programs. Additionally, this could facilitate the creation of novel frameworks to guide policy development in this area. Sixth, while our empirical design identified key insights based on patterns and commonalities within the business com- munity, it did not account for the financial, organizational, and operational resources and capabilities of each venture when endorsing specific CC-related strategies and goals. Future research could build on our findings by developing and test- ing hypotheses that focus on specific groups of MSMEs within the same economic sector, examining how venture-level characteristics either constrain or facilitate the strategic adoption of CC initiatives. Additionally, future studies could explore potential moderation and mediation effects influencing firms’ engagement in CC-related strategies. Finally, our research builds on existing theoretical insights into organizational awareness to shape our analysis. Given the various determinants

influencing CC awareness and strategies, future research could develop new theories that account for the heterogeneity observed across venture size and economic sectors, offering a more nuanced understanding of CC awareness and strate- gic responses. Conclusion This study reveals significant gaps in CC awareness and strategic implementation among MSMEs, yet it also highlights a growing recognition of the direct impact CC has on their operations. By comparing MSMEs with smaller ventures, we provide a nuanced understanding of the varied challenges and opportunities each faces; underscoring the need for targeted educational initiatives, supportive public policies, and strategic partnerships to enhance their capacity to mitigate environmental impact and successfully adapt to CC. Future research should continue to explore these areas, offering deeper insights into effective strategies and interventions that can foster a more sustainable and resilient MSMEs global community. Ultimately, promoting sustainability within MSMEs is not only essential for environmental preservation but also for ensuring long-term economic growth and stability. Supporting information S1 Table. Descriptive statistics. (DOCX) S2 Table. Pairwise correlation and variance inflation factor. (DOCX) Author contributions Conceptualization: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Data curation: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez.

Formal analysis: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Funding acquisition: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Investigation: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Methodology: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Project administration: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez. Resources: Julián Andrés Díaz Tautiva, Sebastián Barros, Antonio Lecuna, Camila Barragan-Rodriguez.

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