The Strategic Logic of Biodiversity: Why Firms Invest in Nature‐Based Initiatives

ABSTRACT Biodiversity loss poses profound strategic and operational challenges for firms, yet management research offers limited evidence on which organisational mechanisms effectively reduce corporate biodiversity impacts. This study introduces the Biodiversity Strategy Configuration Framework (BSCF) to enhance the understanding of firm‐level biodiversity strategy. Drawing on dynamic capabilities, institutional theory, and collaborative governance, this study examines how biodiversity strategy (hereinafter, biodiversity impact reduction) depends on the alignment between nature‐based governance initiative portfolios and external collaborative resources. Using S&P 1500 firms from 2005 to 2024, this study tests the predictions through logit and probit models, interaction effects across four governance portfolios, latent class analysis, marginal effects, and a difference‐in‐differences design. Results show that nature‐based initiatives significantly increase the likelihood that firms will adopt a biodiversity strategy. The study documents that firms with more substantial capability portfolios (both in CSR sustainability and environmental restoration initiatives) implement more proactive and impactful biodiversity strategies. Overall, the results suggest that they support broader sustainability objectives, particularly those outlined in the Sustainable Development Goals (SDG 13: Climate Action, SDG 14: Life Below Water, and SDG 15: Life on Land).