When Stakeholders Ask: Measuring Biodiversity, Climate, and Natural Disaster Risks and Opportunities from Earnings Conference Calls

The world is facing accelerating biodiversity loss, escalating climate risks and more frequent natural disasters, with profound but poorly measured implications for firms and financial markets. While climate finance research has advanced rapidly, biodiversity finance still lacks decision-grade, firm-level indicators that reflect how managers and investors actually talk about nature under scrutiny. This project answers that gap by using earnings conference calls (ECCs) to construct dynamic measures of biodiversity, climate and natural-disaster risks and opportunities, and to examine how these disclosures shape financial outcomes.

Methodologically, we combine expert- and ChatGPT-assisted annotation with transformer-based language models (BERT/FinBERT). We first build a high-quality labelled dataset of ECC excerpts related to biodiversity, climate (transition and physical risks, plus opportunities) and natural disasters. We then fine-tune models on these data and apply them to a global ECC corpus to generate firm-year indicators, disaggregated by risk type and opportunity. These indicators allow us to move beyond static ESG ratings and dictionary methods towards nuanced, high-frequency measures of environmental risk salience.

Empirically, we pursue four research aims. (1) We map how disclosure intensity varies across firms, sectors and geographies, paying special attention to resource-intensive industries and firms located in biodiversity-rich or climate-vulnerable ecoregions. (2) We examine how disclosures respond to major policy shocks, including the Kunming–Montreal Global Biodiversity Framework and US deregulatory episodes affecting the Endangered Species Act. (3) We assess short-term market reactions by relating disclosure around ECC dates to abnormal stock returns. (4) We study longer-run consequences for profitability, valuation, risk, analyst forecasts, investor base and ESG performance, and compare the pricing and real effects of biodiversity versus climate and natural-disaster exposure.

By supplying decision-useful measures aligned with emerging frameworks such as the Taskforce on Nature-related Financial Disclosures, we aim to strengthen nature finance and help investors, firms and regulators integrate biodiversity risks and opportunities into core decision-making.