Do Commodity Prices and Energy Markets Drive Asymmetric Volatility in Biodiversity Finance?

ABSTRACT This study examines symmetric and asymmetric volatility spillovers among biodiversity finance, commodity prices, and energy markets using daily data from 2019 to 2025. We apply the Diebold–Yilmaz time–domain connectedness model, Baruník–Křehlík frequency–domain decomposition, and an asymmetric spillover framework. The results show that total connectedness exceeds 50%, with crude oil, Brent oil, and composite commodity indices emerging as the dominant net transmitters of volatility. At the same time, biodiversity finance, agriculture, livestock, natural gas, and precious metals act as net receivers. Spillovers are limited in the short and medium terms but rise sharply in the long term, with biodiversity finance and agricultural markets becoming net transmitters only at low frequencies, which indicates delayed structural transmission. Positive (good) volatility shocks generated stronger and broader spillovers than negative shocks, with spillovers intensifying during the COVID‐19 pandemic and geopolitical conflicts. The persistent influence of commodity prices and energy markets erodes the long‐run diversification benefits of biodiversity‐linked assets. This calls for horizon‐sensitive portfolio strategies, targeted hedging against good‐volatility shocks, and regulatory measures to strengthen biodiversity finance resilience.