Climate Perception as Catalyst: Process Innovation, Management Support and Performance of Manufacturing Firms in a Climate‐Vulnerable Environment

ABSTRACT

This paper delineates the moderating role of climate perception (CP) on the effect of process innovation (PI) and management support (MS) on the environmental (EP) and financial performance (FP) of firms in a climate‐vulnerable environment. The explanatory survey, stratified random sampling and SmartPLS‐SEM were used to analyse data from 342 respondents across selected ISO 9001‐certified manufacturing companies in Ghana. PI is observed to influence EP but not FP. MS influences both FP and EP, while CP moderates the PI‐FP, PI‐EP and MS‐FP nexus but not that of MS‐EP. The study extends the dynamic capabilities, innovation diffusion and organisational climate theories and suggests that manufacturing firms need to view PI as a strategic requirement and not just a profit mechanism. Manufacturing firms in the Global South should strengthen management support by ensuring adequate resource allocation, demonstrating sustained commitment, and integrating climate vulnerability into organisational decision‐making.