Do Investors Care About Biodiversity?

Do Investors Care About Biodiversity?

Alexandre Garel, Arthur Petit-Romec, Zacharias Sautner, Alexander Wagner

Series number :

Serial Number: 

Date posted :

March 27 2023

Last revised :

June 27 2023
SSRN Share


  • Biodiversity • 
  • Corporate Biodiversity Footprint • 
  • stock returns

This paper introduces a new measure of a firm's negative impact on biodiversity, the corporate biodiversity footprint, and studies whether it is priced in an international sample of stocks. On average, the biodiversity footprint does not explain the cross-section of stock returns.

However, a biodiversity footprint premium (higher returns for firms with larger footprints) began emerging after the Kunming Declaration (October 2021), which capped the first part of the recent UN Biodiversity Conference (COP15). Consistent with this finding, stocks with large footprints lost value in the days after the Kunming Declaration. Their stock prices dropped further after the Montreal Agreement (December 2022), which concluded the second part of the COP15. The results indicate that investors have started to require a risk premium upon the prospect of, and uncertainty about, future regulations to preserve biodiversity.


Real name:
Alexandre Garel
Real name:
Arthur Petit-Romec