Operational Performance, Biodiversity Risk, and Climate Change Exposure: A Dynamic Analysis of US Firms

ABSTRACT This study examines the joint impact of climate change exposure and biodiversity risk on the operational performance of 643 US firms during 2007–2022, focusing on their dynamic productivity change over time. Results show that they can hinder firm performance, with the joint impact played as the main channel of effect. These results were robustly derived from the 2SLS approach after accounting for the endogeneity issue and they do hold under various tests in terms of alternative dependent variables, alternative independent variables, and entropy balancing. Our findings speak to policy debates across Australasia and Southeast Asia regarding climate and biodiversity risk disclosure, offering a timely benchmark on the joint climate–biodiversity risks on firm performance.