SMEs receive increasing institutional support to embed sustainability, yet they vary widely in their ability to translate such support into practice. This study addresses this gap by examining the internal cognitive and strategic mechanism (sustainability orientation) through which managers interpret institutional support, and the contextual pressures that shape this process. Drawing on institutional difference theory and the theory of reasoned action, which explains how managers’ attitudes, norms, and perceived behavioral control shape sustainability intentions, we assess a moderated mediation model linking institutional support to sustainability practices through sustainability orientation, conditional on sustainability challenges. Using Structural Equation Modelling (SEM) on survey data from 342 UK SMEs, we find that sustainability orientation significantly mediates the support-practice relationship, while sustainability challenges amplify the direct effect of support on practice but do not moderate the effect of support on orientation. We further validate the 4Ps framework (People, Planet, Profit, Purpose), demonstrating Purpose as a distinct dimension reflecting long-term societal alignment and regenerative intent. The study advances sustainable entrepreneurship theory by integrating structural, cognitive, and contextual mechanisms shaping SME sustainability adoption.
Ngoasong et al. (Thu,) studied this question.