How biodiversity disclosure enhances ESG performance: The role of entrepreneurship and physical climate risk

This study examines how biodiversity disclosure affects the ESG performance of Chinese publicly listed firms from 2010 to 2022. The results show that biodiversity disclosure has a significant positive impact on ESG outcomes, and that entrepreneurship serves as a mediating mechanism in this relationship. In addition, physical climate risk is found to weaken the effect of biodiversity disclosure on ESG performance, indicating that while disclosure supports improved ESG outcomes, climate shocks may impede firms' capacity to sustain such efforts. Grounded in Stakeholder Theory, the Resource-Based View, and Dynamic Capabilities Theory, the study underscores the importance of integrating biodiversity and climate considerations into corporate sustainability strategies, as well as strengthening firms' entrepreneurial capacities to better navigate biodiversity risks and implement sustainable practices.