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Abstract While sustainable innovation practice is encouraged in enterprises belonging to the manufacturing sector for reducing their carbon footprint and mitigating negative ecological impacts, there is a lack of empirical evidence regarding the effects of sustainable innovation. Hence, this study attempts to investigate the influence of sustainable innovation on stakeholder engagement and societal impact. Additionally, in the study, an attempt is made to bring forth insights into mediation and moderation of SE, and anticipatory governance, respectively. Based on an analysis of cross‐sectional data from 456 Chinese individuals, our empirical results, using partial least square structural equation modeling, reveal significant influences of sustainable innovation on stakeholder engagement and societal impacts. Furthermore, though stakeholder engagement partially mediates the sustainable innovation–societal impact relationship, moderation by anticipatory governance is significant on the sustainable innovation–stakeholder engagement relationship. These findings provide invaluable insight to the policymakers in China to set regulations and incentives that will allow the birth of sustainability in manufacturing industries.
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