Empowering Firms for Climate Risk Resilience: How CSR Strategies, Eco‐Innovation, and Environmental Regulatory Pressure Drive Adaptation to Climate Change

ABSTRACT In response to escalating climate‐related risks, firms are increasingly expected to integrate sustainability into their strategic agendas. However, the mechanisms through which corporate social responsibility (CSR) strategies influence climate risk resilience (CRR), particularly in institutionally fragmented and climate‐vulnerable regions, remain underexplored. This study examines how CSR strategies contribute to firm‐level CRR in the Middle East and North Africa (MENA) region, with a particular focus on the mediating role of eco‐innovation and the moderating influence of environmental regulatory pressure (ERP). Drawing on Dynamic Capabilities Theory and Institutional Theory, the study develops and empirically tests an integrated framework using a panel dataset of 786 listed manufacturing firms across MENA countries from 2010 to 2024. By employing the system generalized method of moments to address endogeneity concerns and ensure robust estimation, the findings reveal a significant positive linear and non‐linear (inverted U‐shaped) relationship between CSR and CRR, indicating that while CSR enhances resilience, excessively high levels of CSR engagement may generate diminishing returns. Eco‐innovation emerges as a key mediating mechanism that translates sustainability intent into adaptive capabilities, while ERP significantly strengthens the effects of both CSR and eco‐innovation on resilience. Heterogeneity analyses further indicate that the effectiveness of CSR varies across regional blocs, industry sectors, and ownership structures. Overall, the findings underscore the importance of innovation‐driven CSR supported by robust regulatory frameworks and offer actionable insights for building resilient, climate‐ready firms in emerging economies.