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Manage biodiversity risk exposure?

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  • Kalhoro, Muhammad Ramzan
  • Kyaw, Khine

Abstract

Using event study approach, we examine the investors’ reactions to biodiversity-related policy events. We study firms that manage their biodiversity risk exposure as well as those that do not. We also study industries with varying level of biodiversity risk exposure. In the days leading up to 2021 Kunming Declaration, firms that manage their biodiversity risk exposure experience positive abnormal returns, but not in the post-event period. The results show positive abnormal returns in both pre- and post- event in the case of 2022 UN Biodiversity Conference. Unclear economic implications ensuing the policy meetings leave firms that do not manage their biodiversity risk exposure unscathed. The market reaction at the industry level depends on how far-reaching the biodiversity risk discussions are.

Suggested Citation

  • Kalhoro, Muhammad Ramzan & Kyaw, Khine, 2024. "Manage biodiversity risk exposure?," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000199
    DOI: 10.1016/j.frl.2024.104989
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    1. Ma, Feng & Wu, Hanlin & Zeng, Qing, 2024. "Biodiversity and stock returns," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    2. Liang, Chao & Yang, Jinyu & Shen, Lihua & Dong, Dayong, 2024. "The role of biodiversity risk in stock price crashes," Finance Research Letters, Elsevier, vol. 67(PA).

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