The Effect of News‐Based Measures of Biodiversity Exposure on Corporate Green Revenue Disclosure

Biodiversity loss has emerged as a significant challenge for firms. As firms face increasing pressure from stakeholders to address nature‐related risks, green revenue disclosure has become a potentially important strategic means of communicating environmentally oriented business activities. Using 12,055 firm‐year observations from S&P 1500 firms from 2005 to 2023, this study examines whether and when a firm with biodiversity exposure (defined as a news‐based measure of biodiversity exposure risk based on textual analyses of 10‐K statements) is associated with green revenue disclosure. The study finds that firms with biodiversity exposure are more likely to disclose green revenue. However, this likelihood masks substantial variation; the negative association emerges with environmental investment. In firms with higher corporate social responsibility (CSR) committees, stronger CSR external audit practices, and environmental partnerships, biodiversity‐exposed firms are associated with greater green revenue disclosure, consistent with the view that continuous CSR monitoring strongly affects such disclosure. The study then traces the consequences of this green revenue disclosure pattern and finds that predicted green revenue reporting is meaningful for reducing the overall cost of capital and improving a firm's efficiency. This study contributes to emerging biodiversity literature by showing that biodiversity exposure is not directly associated with green revenue disclosure; rather, its effect depends on environmental accountability, partnerships, and investment.