Beyond climate risk: corporate biodiversity risk exposure and green technology innovation

Abstract: This study explores the impact of biodiversity risk exposure on corporate green technology innovation using data from Chinese listed companies. The study finds the following: First, biodiversity risk exposure notably boosts corporate green technology innovation. This positive relationship is independent of climate risk and remains robust across a series of sensitivity tests. Second, biodiversity risk exposure promotes green technology innovation primarily through investment channels (e.g., reducing profit-driven motives and increasing R&D investment), financing channels (e.g., improving credit access and easing funding constraints), and external oversight channels (e.g., increasing analyst attention and research report coverage). Third, The positive impact of biodiversity risk exposure on green technology innovation is stronger in energy-intensive industries and high carbon-emission areas. Additionally, the implementation of green financial policies enhances the innovation-promoting effect of corporate biodiversity risk exposure. Fourth, when categorizing types of innovation, the study reveals that biodiversity risk exposure primarily fosters substantive innovation rather than strategic innovation.