Firm-level nature dependence

A. Garel (), A. Arthur Romec, Z. Sautner and A. Wagner
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A. Garel: Audencia Business School

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Abstract: We construct firm-level measures of dependence on ecosystem services (NatureDep scores) for 31,778 listed firms in 117 countries between 2010 and 2023, combining the ENCORE database with firm-level revenue information. NatureDep scores positively correlate with impact on biodiversity, are unrelated to nature-related actions disclosed in the CDP survey, and are not reflected in firms' corporate disclosures. We employ the measures in three applications. First, NatureDep scores predict BlackRock's biodiversity-related engagements, indicating perceived financial materiality. Second, the scores are positively associated with measures of downside risk, with effects stemming mostly from high dependencies to water-related ecosystem services. Third, the scores predict nature-related ESG incidents that arise when high nature dependence leads firms to damage nature, overuse resources, or trigger disputes with local communities. Overall, 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)
Date: 2026-01
Note: View the original document on HAL open archive server: https://hal.science/hal-05521427v1
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Published in Review of Finance, 2026, 30 (1), pp.231-272. ⟨10.1093/rof/rfaf069⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05521427

DOI: 10.1093/rof/rfaf069

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