Biodiversity Exposure and Climate-Risk Disclosure: Evidence from Chinese A-Share Firms

Abstract

This study tests whether firm-level biodiversity exposure drives climate-risk disclosure by Chinese A-share firms from 2010 to 2024. We build text-based indicators aligned with the Task Force on Climate-related Financial Disclosures and assemble an unbalanced panel of about 22,500 firm-year observations. The empirical design uses firm and year fixed effects with two-way clustered standard errors. We run robustness checks with alternative exposure measures, zero-inflated models, firm-specific trends, and placebo tests. Firms with higher biodiversity exposure disclose more intensively on climate risks. The effect is stronger in ecologically sensitive industries and among firms with greater revenue exposure to the European Union, consistent with legitimacy, stakeholder, and cross-border spillover mechanisms. Mechanism tests show that the increase concentrates in substantive components such as risk management and metrics and targets, rather than in broad governance or strategy text. The results highlight biodiversity as a material driver of corporate transparency in an emerging market and suggest integrating biodiversity considerations into global reporting rules, including IFRS S2 and the Taskforce on Nature-related Financial Disclosures.