Biodiversity Risk

Stefano Giglio, Theresa Kuchler, Johannes Stroebel and Xuran Zeng

No 31137, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the effects of physical and regulatory risks related to biodiversity loss on economic activity and asset values. We first develop a news-based measure of aggregate biodiversity risk and analyze how it varies over time. We also construct and publicly release several firm-level measures of exposure to biodiversity risk, based on textual analyses of firms’ 10-K statements, a large survey of financial professionals, regulators, and academics, and the holdings of biodiversity-related funds. Exposures to biodiversity risk vary substantially across industries in a way that is economically sensible and distinct from exposures to climate risk. We find evidence that biodiversity risks already affect equity prices: returns of portfolios that are sorted on our measures of biodiversity risk exposure covary positively with innovations in aggregate biodiversity risk. However, our survey indicates that market participants do not perceive the current pricing of biodiversity risks to be adequate.

JEL-codes: G10 G11 G12 Q5 Q53 Q57 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-env and nep-rmg
Note: AP CF EEE EFG ME PE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w31137.pdf (application/pdf)

Related works:
Working Paper: Biodiversity Risk (2023)
Working Paper: Biodiversity Risk (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31137

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31137

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().