<p>This study is aimed at analysing the interaction effects of extended warranty, the retailer’s risk aversion, the mechanisms of remanufacturing governance, and process innovation under a closed-loop supply chain. By developing a Stackelberg game-theoretic model, a closed-loop supply chain with one original equipment manufacturer, one risk-averse retailer, and one authorised third-party remanufacturer, under the authorisation structure versus the outsourcing structure, is studied. Warranty is modelled into the customer demand and operating costs, and process innovation is integrated into the remanufacturing performance of efficiency and the environment. Results demonstrate that a retailer’s risk aversion reduces the sales of new products and stimulates remanufacturing and innovation investment, especially under the outsourcing scenario. An extended warranty increases consumer willingness to purchase remanufactured products and stimulates innovation investment, and improves the environmental performance, but creates unequal profit benefits to the members of the supply chain. Results reveal that outsourcing is more beneficial for the OEM and innovation investment than the authorisation system, while authorisations are beneficial for the retailer and remanufacturer. The outcomes offer managerial implications to establish a closed-loop supply chain with the objective of both sustainability and efficiency under the conditions of demand uncertainty and environmental concerns.</p>