Conference Agenda

Increasing attention is being devoted towards measuring biodiversity risks of compa-

nies to better understand how biodiversity is priced on financial markets. Against this

backdrop, we introduce a new company-specific Corporate Deforestation Exposure (CDE)

metric that zooms in on the broad notion of biodiversity risk. We use the CDE metric to

conduct long-term asset pricing analyses of a Brown Minus Green (BMG) deforestation risk

portfolio and a short-term event study of the EU Deforestation Regulation (EUDR). We

find that the BMG deforestation risk portfolio does not pay a deforestation risk premium in

the long term. In the short term, however, we show that companies with high deforestation

transition risk exhibit significant negative abnormal returns after the trilogue agreement

of the EUDR. We ensure that our findings do not merely pick up climate or overall bio-

diversity risk-related pricing. Our findings are relevant for all stakeholders interested in

assessing deforestation risks.

Human activities have multifaceted impacts on the terrestrial biosphere, which are rarely measured in terms of the economic value derived from them, and which therefore drives them. This is crucial for green growth transitions aimed at reducing biodiversity loss. Here we employ the Biodiversity Intactness Index (BII) and the percentage of Human Appropriation of Net Primary Production (HANPP) to define and assess the intensity of production-based biosphere degradation with national economic output. Degradation intensity has roughly halved globally from 1990 to 2010, though variation persists among countries, with higher levels observed in those heavily reliant on agriculture and oriented towards exports of raw materials. These relationships imply that trade imbalances can shift biodiversity degradation intensity from developed to developing economies by up to 50%. Additionally, we examine decoupling rates between economic growth and biosphere degradation, finding that less than half of countries have fully decoupled, primarily those with decreasing agriculture land use and population density, as well as increasing agricultural total factor productivity. Although decoupling rates improved between 1990-2000 and 2000-2010, the percentage achieving absolute decoupling remained largely unchanged.

Despite it being well documented that small and medium-sized enterprises (SMEs) face barriers engaging in the circular economy (CE), empirical research examining these barriers across specific circular business models (CBMs) and sectors is scarce. Advancing the CE literature, this paper provides a systematic analysis of barriers across different CBMs by surveying 452 Irish SMEs in the construction, manufacturing and retail/wholesale sectors and examining the barriers to engagement in five CBM activities: (i) using secondary raw materials, (ii) taking back old/used goods, (iii) providing repair/maintenance services, (iv) selling remanufactured/refurbished goods, and (v) offering leasing/rental services. Key findings show that the primary barriers to these CBM activities vary considerably by sector. Critical barriers are also identified. For using secondary raw materials, construction and manufacturing SMEs face cost and access challenges. For taking back old/used goods, construction SMEs are deterred by a lack of business partners and revenue risks, while retail/wholesale SMEs have concerns about the quality of returned goods. For selling remanufactured/refurbished goods, construction SMEs are deterred by malfunction risks. For offering leasing/rental services, construction SMEs are hindered by high upfront investment costs and contract risks, while retail/wholesale SMEs have concerns about regulations and product standards. The paper’s findings provide valuable insights for policymakers seeking to support SME engagement in the CE. Policy implications are discussed, highlighting the need for targeted interventions to address both CBM- and sector-specific challenges.

How does access to finance matter for the greening of our economies? This paper

exploits the staggered natural experiment of US state-level banking deregulation and

its interaction with regional variation in the tightness of environmental regulation as

created by the Clean Air Act (CAA) to shed light on this question. We document

that banking deregulation is strongly linked to the reduction of US industrial emissions

after 1990. Deregulation improved firm-level access to finance, in particular for small

and medium enterprises (SME). Tightening environmental standards requires firms to

adapt, either by cleaning up their production (the intensive margin) or by closing down

or reallocating their activities to cleaner products or to more lenient jurisdictions (the

extensive margin). This usually requires access to credit. We show using employment

and emissions data from local economies (states, counties) as well as from individual

plants that financially more open local economies saw a swifter reduction in emissions,

mainly along the intensive margin. This happened because financially open places had

a more elastic credit supply due to a stronger presence of banks with geographically

diversified credit portfolios (“integrated banks”).