Attention to biodiversity and stock returns

Abstract

Our study empirically explores how public interest in biodiversity influences the financial performance of novel investment solutions that specifically promote biodiversity. We consider three distinct metrics capturing public attention to biodiversity: the daily Google Search Volume index for “biodiversity”, the daily media coverage of biodiversity, and the daily visits to the “biodiversity” page on Wikipedia. We also use the UN Biodiversity Conference (COP 15) as quasi-natural experiment. Our econometric analyses reveal a positive association between attention to biodiversity and excess stock returns on biodiversity stock indices. This suggests a growing investor preference for companies with the lowest biodiversity footprints when attention to biodiversity is particularly intense. These fresh insights offer important financial and policy implications.