ABSTRACT This study investigates the influence of managerial climate awareness (MCA) on corporate financial sustainability (CFS) among Chinese A‐share listed firms from 2010 to 2023. Employing a comprehensive panel dataset, the research elucidates the mediating roles of green innovation and environmental violations, as well as the moderating effect of managerial myopia. The findings reveal that enhanced MCA significantly contributes to improved CFS by fostering green innovation and mitigating environmental violations. Notably, a paradox emerges where environmental violations correlate positively with CFS, particularly under conditions of high managerial myopia, highlighting a tendency for myopic managers to prioritize short‐term financial gains at the expense of sustainable practices. This study highlights the crucial importance of incorporating long‐term strategic perspectives into managerial decision‐making to effectively leverage climate awareness for sustainable financial outcomes. The implications for corporate governance and policy are significant, advocating for a shift towards climate‐conscious leadership in the face of escalating environmental challenges.
Hussain et al. (Wed,) studied this question.