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Can biodiversity risk improve firm ESG performance? Empirical evidence from China

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  • Pi, Tianlei
  • Jiao, Linke
  • Zhou, Yuhan
  • Shi, Jin

Abstract

We examine the relationship between biodiversity risk and firm ESG performance in Chinese A-share listed companies from 2013 to 2023. We find a significantly positive relationship between biodiversity risk and firm ESG performance, and this conclusion still holds after robustness and endogeneity tests. The mechanism analysis shows that green innovation and external regulation are the main channels through which biodiversity risk promotes firm ESG performance. In addition, the effect of biodiversity risk on ESG performance is also significantly heterogeneous due to the ownership structure, the different level of industrial pollution.

Suggested Citation

  • Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2025. "Can biodiversity risk improve firm ESG performance? Empirical evidence from China," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325001953
    DOI: 10.1016/j.frl.2025.106931
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