Biodiversity Risk, Firm Performance, and Market Mispricing
Abstract
Combining new data on biodiversity-capacity and biodiversity-footprint with firm fundamentals, we conduct a causal analysis of the impact of biodiversity physical risk on firms’ profitability and stock returns. With this purpose, we build a biodiversity index for 35 countries and use a time series model to capture its variation over time. We show that such time trend estimation can be aggregated as risk exposure and can significantly forecast establishment-level profitability. We then show that the market underprices biodiversity physical risk due to insufficient analysis of related information and its impact on the firm-level future cash flow. We also document disparities of risk exposure across firms and sectors, and our results are consistent with previous findings regarding climate physical riskrate breakthroughs.
About the speaker
Anna Creti is Full Professor of Economics at Université Paris Dauphine – PSL, where she leads the Climate Economics Chair. She is also co-founder and Scientific Director of the Economics of Gas Chair, in collaboration with TSE, IFPEN, and Mines Paris. Her research explores the economics of energy transitions, carbon pricing, and climate finance. She has held academic positions at Bocconi University, Université Paris Nanterre, and the Toulouse School of Economics. A recognized expert in regulatory and policy design, she has advised institutions such as France Stratégie, the AMF, and the French energy regulator. Anna Creti has published extensively in leading academic journals such as Energy Economics, The Energy Journal, Nature Sustainability, and Environmental and Resource Economics. She holds a PhD in Economics from Université Toulouse 1 and completed a postdoc at the London School of Economics.
Language
English
This is a free seminar. Registration is mandatory.