Biodiversity Finance Conference

Peter G. Iliev, Jennifer Liang, and Jess Cornaggia

This project examines the impact of climate change on agricultural productivity and its reflection in the valuation of local agricultural assets. Historical and projected changes in crop yields are increasingly linked to farmland real estate values, though the effect is mitigated by agrodiversity, which allows for crop variety. The research aims to analyse farmland values using granular property-level data and by investigating the impact on local government bonds, particularly in agriculturally dependent economies. These findings could guide policymakers in addressing natural resource management, supporting vulnerable communities, and enhancing global food security.

Douglas Almond, and Zoey Yiyuan Zhou.

This project investigates the biodiversity ‘co-benefits’ claimed by carbon offset projects, which have been largely unsupported by empirical evidence. It combines data from 10,911 voluntary carbon offset projects with satellite-based ecosystem data and explores whether carbon finance and conservation goals align and whether a disconnect exists between stated biodiversity goals and actual ecological impacts.

Massimo Guidolin, and Manuela Pedio.

This project investigates the link between biodiversity risk and commodity prices, addressing an underexplored area in financial economics. It examines whether investors demand a premium for commodities with high biodiversity exposure, as biodiversity loss – driven by deforestation for agricultural and energy production – exacerbates climate change in a reinforcing feedback loop. With emerging regulations targeting ecological preservation, such commodities may face significant transition risks. The study leverages innovative data and controls to isolate biodiversity risk from broader environmental risks, offering new insights into its impact on commodity pricing.

G. Andrew Karolyi, William W. Xiong, Hui Xu, and Sean S. Cao.

The project examines the effectiveness of venture capital financing for emerging biodiversity-focused startups, which differ from large public firms where biodiversity projects are secondary initiatives. It explores tools to improve funding outcomes. Social media is highlighted as a potential tool for overcoming challenges these ventures face, such as limited investor bases and the complexity of nature-related business models. The project uses data from platforms like Twitter, LinkedIn and investment sources like Crunchbase and PitchBook to study how social media can help engage investors and reduce information gaps.

Ted Liu, Brook Constantz, Michael Beck, and Galina Hale.

This project quantifies the financial benefits of nature-based solutions to climate adaptation and aims to contribute to existing knowledge on pricing climate risks and identifying cost-effective risk reduction solutions. It focuses on the role that mangroves have on reducing home price declines and price variability following major hurricanes in 2004, 2012, and 2017. The project explores the private financial benefits of mangrove protection and the role of private funding as a key source for financing restoration projects.

Snorre Gjerde, Zacharias Sautner, Alexis Wegerich, and Alexander Wagner.

This project aims to explore how companies perceive and manage nature risks and how they interact with institutional investors on this issue. The survey themes include corporate exposure to nature risks, investor interest in these risks and nature-related disclosures. Distributed through a large asset owner to its portfolio companies, the survey provides early insights into corporate views and actions on emerging nature risks and their alignment with investor perspectives. The findings could assist regulators, investors and academics in shaping policies and models related to nature risks in corporate finance and asset pricing, as well as understanding the impact of investor engagement.

Franklin Allen, Patrick Behr, Riccardo Cosenza, and Eric Nowak.

This project explores how investors respond to firms’ activities in the Voluntary Carbon Market (VCM) using a dataset covering VCM transactions and retirements from 2009 to 2023. Publicly listed firms primarily retire carbon credits linked to rainforest conservation projects, as deforestation is a key driver of climate change and biodiversity loss.

Andre Poyser.

This project explores the impact of financing on biodiversity risks, focusing on endangered species, species richness, species protection, and data coverage. Using data from 13,919 biodiversity projects funded by 114 European agencies, the research distinguishes between public and private financing. The project also highlights the potential of biotechnology-focused projects to attract private investment, as these projects may generate future cash flows through ancillary technological applications.

Arthur Romec, Zacharias Sautner, , Alexander Wagner, and Alexandre Garel.

This project aims to explore firms’ dependence on nature with four key objectives:

1. develop measures of nature dependence
2. analyse the factors that contribute to this dependency and how these feature in corporate disclosures
3. examine the relationship between nature dependence, biodiversity impacts and physical climate risks
4. investigate the financial market implications, specifically how nature dependence relates to downside risk and stock price reactions when firms face ecosystem shocks.

It analyses over 25,000 firms across 100+ countries between 201 and 2022 and plans to make these measures publicly available.

Amir Akbari, Man Duy (Marty) Pham, Jing Yu, and Lilian NG.

This project introduces a new Corporate Biodiversity Risk (CBR) measure to assess biodiversity risk and its financial impacts at the organisation/establishment level. CBR evaluates the proximity of corporate production sites to protected areas in the contiguous US to quantify risk. It uses data from 1990 to 2021.