A bird's-eye view: firm biodiversity footprints and earnings expectations

The current draft is available on request — please email me.

This paper builds a standardized measure of firms’ ecological impact — a biodiversity footprint index — from millions of citizen-science bird observations, satellite-inferred facility construction dates, and facility locations in the EPA’s Toxics Release Inventory. Difference-in-differences estimates show that constructing an industrial facility reduces nearby bird abundance by 6–9% and species richness by 3–5%.

The index then links this ecological damage to financial outcomes: firms with large footprints have persistently higher production costs that investors initially interpret as operational decline. Forecast errors correct around earnings announcements, producing abnormal returns among small- and mid-cap firms. Despite facility locations being public information, high-footprint firms disclose less voluntary biodiversity information.

An earlier version of this work circulated as “Firm operations, biodiversity loss, and corporate disclosure”, which received the Best PhD Paper Award at the Global Research Alliance for Sustainable Finance and Investment (GRASFI) 2025.