Unpacking the Role of Biodiversity Impact Reduction in ESG Performance

Post Raj Pokharel

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 6, 8094-8110

Abstract: Using panel data of S&P 1500 firms from 2005 to 2024, I investigate the effect of a firm's effort to reduce biodiversity impact on sustainable business practices. I uncover strong evidence that firms engaging in biodiversity impact reduction practices have Environmental, Social, and Governance (ESG) scores that are, on average, 13.42 points higher than those that do not. I further document that firms having the capacity to reduce environmental costs through environmental technologies have a mediating role in the relationship between biodiversity impact reduction and ESG performance. My study contributes to the corporate biodiversity and environmental management literature and offers policy‐relevant insights into how biodiversity‐related disclosures are perceived in ESG assessments.

Date: 2025
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https://doi.org/10.1002/csr.70130

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:32:y:2025:i:6:p:8094-8110

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