Abstract:
Climate change has become a material governance and performance issue for firms
operating in climate-sensitive sectors. This study examined the relationship between
climate change management practices and firm performance among listed
manufacturing firms in Zimbabwe. The study was motivated by the increasing
exposure of manufacturing firms to physical, transition, regulatory and reputational
climate risks within a context of energy insecurity, macroeconomic instability, policy
pressure and resource constraints. An explanatory sequential mixed-methods design
was adopted. The quantitative phase analysed a balanced panel of 13 listed
manufacturing firms over the 2021-2024 period, producing 52 firm-year observations.
Firm performance was measured using return on assets (ROA), return on equity
(ROE) and Tobin's Q. Climate change risk reporting (CCR) and climate change
strategy (CCS) were measured using disclosure-based scores derived from annual
reports, sustainability reports and publicly available corporate documents. Randomeffects
panel regression, fixed-effects sensitivity checks, restricted Hausman testing,
diagnostic tests, lagged models and robustness checks were used. The qualitative
phase used documentary thematic analysis to explain and contextualise the statistical
results.
The findings show that CCR and CCS do not have consistently robust direct effects
on ROA, ROE or Tobin's Q. CCR appears to function mainly as a risk-identification,
compliance and legitimacy signal rather than an independent short-term performance
driver. CCS shows stronger practical relevance, but its direct financial effect is
constrained by implementation costs, limited climate finance, infrastructure
weaknesses and uneven firm capabilities. The strongest evidence is found in the
moderation results: the interaction between CCR and CCS is positive and significant
for accounting-based performance, particularly ROA and ROE, especially in lagged
models. This suggests that climate strategy operates as a conditional resilience
capability, shaping whether climate risk exposure becomes financially damaging or
manageable. Tobin's Q is more consistently associated with firm size than climate
variables, indicating that market valuation in this context may reflect scale, visibility
and organisational capacity more than climate strategy alone. The study contributes
empirically by providing firm-level evidence from Zimbabwe, theoretically by
integrating institutional, legitimacy, stakeholder and resource-based perspectives, and
practically by offering a framework for assessing climate governance, strategy,
implementation and resilience outcomes in manufacturing firms.
