Biodiversity risk and seasoned equity offerings

• Firms exposed to significant biodiversity risks are more inclined to engage in seasoned equity offerings (SEOs). • The finding is particularly driven by the need for external financing to manage and mitigate biodiversity risks. • Greater managerial capabilities enhance a firm's ability to manage biodiversity risks through the strategic use of SEOs. • This study highlights the impact of biodiversity risk on external financing decisions, contributing new insights to the corporate finance literature. This study explores the relationship between a firm's exposure to biodiversity risk and its decision to undertake seasoned equity offerings (SEOs). Our results show that firms facing significant biodiversity risks are more likely to engage in SEOs, especially those with greater external financial needs. Additionally, firms with stronger managerial capabilities are better equipped to manage biodiversity risks by obtaining additional funding through SEOs. Our research adds to the corporate finance literature by emphasizing the influence of biodiversity risk on a firm's external financing decisions.