Work

Examining the Financial Impact of Biodiversity‐Related Reputational Disasters

Year: 2025

Type: article

Abstract: ABSTRACT This research investigates the reaction of financial markets to biodiversity‐related corporate events, utilising an EGARCH model to assess the implications on stock returns and volatility. Results reveal that markets significantly respond to these events, demonstrating heightened sensitivity and volatility that underscore the financial relevance of biodiversity risks. We find that investors differentiate between events based on their novelty and severity, reflecting a nuanced valuation approach towards environmental information, highlighting the importance of transparency and the role of information asymmetry in market efficiency. Our findings advocate for stricter disclosure requirements and enhanced regulatory frameworks to improve market transparency concerning environmental risks. This research underscores the need for further integration of biodiversity considerations into financial decision‐making and regulatory policies.

Source: Corporate Social Responsibility and Environmental Management

DOI: 10.1002/csr.3197

Authors: Erdinc Akyildirim, Shaen Corbet

Institutions: University of Nottingham, University of Zurich, Dublin City University, University of Waikato

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,100

OpenAlex ID: W4409190845