Firm-level nature dependence

Alexandre Garel, Arthur Romec, Zacharias Sautner and Alexander Wagner

Review of Finance, 2026, vol. 30, issue 1, 231-272

Abstract: We construct firm-level measures of dependence on ecosystem services (NatureDep scores) for 31,772 listed firms in 117 countries between 2010 and 2023, combining the Exploring Natural Capital Opportunities, Risks, and Exposure (ENCORE) database with firm-level revenue information. The scores capture exposure to physical nature risks, with financial effects additionally depending on the deterioration of ecosystem services. NatureDep scores positively correlate with impact on biodiversity, are unrelated to nature-related actions disclosed in the Carbon Disclosure Project (CDP) survey, are not reflected in firms’ corporate disclosures, and predict BlackRock’s biodiversity-related engagements. We employ the scores in two applications. First, the scores relate positively to measures of downside risk, with effects stemming mostly from high dependencies on water-related ecosystem services. Second, the scores predict nature-related incidents that arise when high nature dependence leads firms to damage nature, overuse resources, or trigger disputes with local communities. We conclude that investors started to pay attention to nature dependence, while corporate action and disclosure remain limited.

Keywords: nature risk; biodiversity risk; nature dependence; physical risk; shareholder engagement (search for similar items in EconPapers)
JEL-codes: G12 G30 Q57 (search for similar items in EconPapers)
Date: 2026
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