Do investors care about the rainforest? Evidence from voluntary carbon offsets around the world

Franklin Allen, Patrick Behr, Riccardo Cosenza and Eric Nowak

Review of Finance, 2026, vol. 30, issue 1, 321-349

Abstract: We explore how investors react to firms’ biodiversity-focused activities in the Voluntary Carbon Market. The average stock price reaction of forestry carbon offsetting with and without biodiversity impact is not significantly different from zero until the end of 2022. Following a Guardian article claiming rainforest carbon offsets to be “worthless” in January 2023, the announcement returns to carbon credit retirements turned significantly negative. This effect is not significant for carbon credits contributing to biodiversity conservation certified by the Climate, Community & Biodiversity (CCB) Standard, but it is significantly negative for other credits. Our results show that investors care about both the biodiversity impact of carbon credits as well as the climate-change mitigation integrity of offsetting activities.

Keywords: biodiversity; carbon offsets; carbon pricing; climate change; climate finance; rainforest; voluntary carbon markets (search for similar items in EconPapers)
JEL-codes: G11 G12 Q21 Q23 Q54 (search for similar items in EconPapers)
Date: 2026
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