Table A1 Variable specification...

Table A1

Variable specification

Variables	Description	Data source
Ln (1 + Dividend)	Natural logarithm of 1 plus the amount of dividend declared on common shares	Compustat
Dividend Per Share	Ratio of dividends declared on common shares to the total number of shares outstanding	Compustat
Biodiversity_Regulation	The 10 K-Biodiversity-Regulation Score measures firm exposure to biodiversity risks related to regulations. It assigns a score of “1” if a firm's 10-K statement contains at least two sentences mentioning biodiversity risks and at least one of these sentences references regulatory terms such as laws, regulations, or restrictions; otherwise, it assigns a score of “0”	Giglio et al. (2026)
Biodiversity_Negative	The 10 K-Biodiversity-Negative Score assesses the sentiment of biodiversity mentions in firms' 10-K statements. Using the BERT model for sentiment analysis, this score specifically counts biodiversity-related sentences with negative sentiment, indicating perceived risks rather than opportunities	Giglio et al. (2026)
Biodiversity_Count	10 K-Biodiversity-Count Score quantifies biodiversity risk exposure based on textual analysis of firms' 10-K statements. A score of “1” is assigned if a statement includes at least two sentences related to biodiversity; otherwise, a score of “0” is given	Giglio et al. (2026)
PPE to Assets	Ratio of Property, Plants and Equipment to total assets	Compustat
CAPEX Ratio	Ratio of capital expenditure to total assets	Compustat
Leverage	Sum of current and long-term liabilities divided by total assets	Compustat
ROA	Ratio of net income to total assets	Compustat
Firm Size (Ln (Total Assets))	Natural logarithm of total assets	Compustat
Market to Book Equity	Ratio of market to book value of total equity	Compustat
Cash Flow Ratio	Ratio of operating income before depreciation minus interest expenses, taxes, and common dividends, all divided by the book value of assets	Compustat
Net Working Capital	Difference between current operating assets and current operating liabilities divided by total assets	Compustat
High Financial Constraint	Dummy variable taking the value of 1 if the firm has higher than median values of the “delaycon” measure – facing risk of delaying their investments due to issues with liquidity	Hoberg and Maksimovic (2015)
High WW Index	Dummy variable taking the value of 1 if the firm has higher than median values of the Whited-Wu index ${W W}_{i, t} = - 0.091 \times \frac{{C F}_{i, t}}{{B A}_{i, t - 1}} - 0.062 \times {D I V P O S}_{i, t} + 0.021 \times \frac{{L D}_{i, t}}{{A S S E T S}_{i, t - 1}} - 0.044 \times {S I Z E}_{i, t} - 0.035 \times {S G}_{i, t} + 0.102 \times {I S G}_{i, t}$ where BA is the book value of total assets, DIVPOS is a dummy variable, equal to 1 if the dividend is positive. LD denotes long-term debt, Size is the logarithm of total assets, SG is sales growth and ISG means industrial sales growth	Author Constructed
RE/TE	Ratio of earned equity to total common equity	Compustat
RE/TA	Ratio of earned equity to total assets	Compustat
CEO Age	Age of the CEO of the firm	Execucomp

Variables	Description	Data source
Ln (1 + Dividend)	Natural logarithm of 1 plus the amount of dividend declared on common shares	Compustat
Dividend Per Share	Ratio of dividends declared on common shares to the total number of shares outstanding	Compustat
Biodiversity_Regulation	The 10 K-Biodiversity-Regulation Score measures firm exposure to biodiversity risks related to regulations. It assigns a score of “1” if a firm's 10-K statement contains at least two sentences mentioning biodiversity risks and at least one of these sentences references regulatory terms such as laws, regulations, or restrictions; otherwise, it assigns a score of “0”	Giglio et al. (2026)
Biodiversity_Negative	The 10 K-Biodiversity-Negative Score assesses the sentiment of biodiversity mentions in firms' 10-K statements. Using the BERT model for sentiment analysis, this score specifically counts biodiversity-related sentences with negative sentiment, indicating perceived risks rather than opportunities	Giglio et al. (2026)
Biodiversity_Count	10 K-Biodiversity-Count Score quantifies biodiversity risk exposure based on textual analysis of firms' 10-K statements. A score of “1” is assigned if a statement includes at least two sentences related to biodiversity; otherwise, a score of “0” is given	Giglio et al. (2026)
PPE to Assets	Ratio of Property, Plants and Equipment to total assets	Compustat
CAPEX Ratio	Ratio of capital expenditure to total assets	Compustat
Leverage	Sum of current and long-term liabilities divided by total assets	Compustat
ROA	Ratio of net income to total assets	Compustat
Firm Size (Ln (Total Assets))	Natural logarithm of total assets	Compustat
Market to Book Equity	Ratio of market to book value of total equity	Compustat
Cash Flow Ratio	Ratio of operating income before depreciation minus interest expenses, taxes, and common dividends, all divided by the book value of assets	Compustat
Net Working Capital	Difference between current operating assets and current operating liabilities divided by total assets	Compustat
High Financial Constraint	Dummy variable taking the value of 1 if the firm has higher than median values of the “delaycon” measure – facing risk of delaying their investments due to issues with liquidity	Hoberg and Maksimovic (2015)
High WW Index	Dummy variable taking the value of 1 if the firm has higher than median values of the Whited-Wu index ${W W}_{i, t} = - 0.091 \times \frac{{C F}_{i, t}}{{B A}_{i, t - 1}} - 0.062 \times {D I V P O S}_{i, t} + 0.021 \times \frac{{L D}_{i, t}}{{A S S E T S}_{i, t - 1}} - 0.044 \times {S I Z E}_{i, t} - 0.035 \times {S G}_{i, t} + 0.102 \times {I S G}_{i, t}$ where BA is the book value of total assets, DIVPOS is a dummy variable, equal to 1 if the dividend is positive. LD denotes long-term debt, Size is the logarithm of total assets, SG is sales growth and ISG means industrial sales growth	Author Constructed
RE/TE	Ratio of earned equity to total common equity	Compustat
RE/TA	Ratio of earned equity to total assets	Compustat
CEO Age	Age of the CEO of the firm	Execucomp

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Table A2

Year-wise percentage distribution of biodiversity risk measures (BioRegulation and BioCount)

Year	Regulation	Count
2001	0.55%	1.17%
2002	0.36%	0.73%
2003	1.10%	2.00%
2004	0.70%	1.52%
2005	0.77%	1.98%
2006	0.98%	1.96%
2007	1.32%	2.21%
2008	1.36%	2.33%
2009	1.26%	2.17%
2010	1.66%	2.65%
2011	1.85%	2.97%
2012	2.40%	3.73%
2013	2.33%	3.08%
2014	2.86%	3.88%
2015	2.73%	3.98%
2016	3.16%	4.58%
2017	4.24%	5.28%
2018	4.57%	5.51%
2019	3.61%	4.74%
2020	3.60%	4.75%

Year	Regulation	Count
2001	0.55%	1.17%
2002	0.36%	0.73%
2003	1.10%	2.00%
2004	0.70%	1.52%
2005	0.77%	1.98%
2006	0.98%	1.96%
2007	1.32%	2.21%
2008	1.36%	2.33%
2009	1.26%	2.17%
2010	1.66%	2.65%
2011	1.85%	2.97%
2012	2.40%	3.73%
2013	2.33%	3.08%
2014	2.86%	3.88%
2015	2.73%	3.98%
2016	3.16%	4.58%
2017	4.24%	5.28%
2018	4.57%	5.51%
2019	3.61%	4.74%
2020	3.60%	4.75%

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Table A3

Correlation matrix between the biodiversity risk measures

	Regulation	Count	Negative
Regulation	1.0000
Count	0.8179	1.0000
Negative	0.4809	0.3975	1.0000

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Table A4

Baseline regression results for the restricted sample of firms exposed to biodiversity risk, paying dividends and estimations using lagged independent variables

Dependent variable	(1)	(2)	(3)	(4)	(5)	(6)
Dependent variable	Ln (1 + dividend)	Dividend payout ratio	Ln (1 + dividend)	Dividend payout ratio	Ln (1 + dividend)	Dividend payout ratio
BioRegulation	−0.4511***	−0.0709***	−0.8247***	−0.0803***	−0.3848***	−0.0815***
BioRegulation	(0.0909)	(0.0250)	(0.0923)	(0.0303)	(0.0812)	(0.0228)
Constant	−3.9464***	−0.1597*	−3.8396***	0.5038***	−3.8037***	−0.0205*
Constant	(0.3651)	(0.0819)	(0.1236)	(0.0408)	(0.0760)	(0.0113)
Observations	1,793	1,778	15,905	15,890	27,522	27,492
Adjusted R-squared	0.5953	0.0717	0.4801	0.0740	0.4348	0.1027
Controls	YES	YES	YES	YES	YES	YES
Year FE	YES	YES	YES	YES	YES	YES
Industry FE	YES	YES	YES	YES	YES	YES

Dependent variable	(1)	(2)	(3)	(4)	(5)	(6)
Dependent variable	Ln (1 + dividend)	Dividend payout ratio	Ln (1 + dividend)	Dividend payout ratio	Ln (1 + dividend)	Dividend payout ratio
BioRegulation	−0.4511***	−0.0709***	−0.8247***	−0.0803***	−0.3848***	−0.0815***
BioRegulation	(0.0909)	(0.0250)	(0.0923)	(0.0303)	(0.0812)	(0.0228)
Constant	−3.9464***	−0.1597*	−3.8396***	0.5038***	−3.8037***	−0.0205*
Constant	(0.3651)	(0.0819)	(0.1236)	(0.0408)	(0.0760)	(0.0113)
Observations	1,793	1,778	15,905	15,890	27,522	27,492
Adjusted R-squared	0.5953	0.0717	0.4801	0.0740	0.4348	0.1027
Controls	YES	YES	YES	YES	YES	YES
Year FE	YES	YES	YES	YES	YES	YES
Industry FE	YES	YES	YES	YES	YES	YES

Note(s): In this table, the baseline regression model is estimated for the restricted sample of firms that are exposed to biodiversity risk and paid a dividend during the time period of 2001–2020 and estimations considering the lagged independent variables. Ln (1 + Dividend) and Dividend Payout Ratio are the dependent variables in specifications 1, 3 and 5, and 2, 4 and 6, respectively. Specifications 5 and 6 considers the lagged independent variables of the baseline model. Year and industry fixed effects are taken into account in all specifications. Appendix Table A1 provides a thorough explanation of every variable. Robust standard errors, clustered at the firm level, are in parentheses. Significance at the 1%, 5%, and 10% levels is denoted by the symbols ***, **, and *, respectively

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Table A5

Re-estimated baseline regressions using average dividend payout ratio over the last 3 years as the dependent variable

Dependent variable: average dividend payout ratio	(1)	(2)
BioRegulation	−0.0659***
BioRegulation	(0.0157)
BioCount		−0.0704***
BioCount		(0.0118)
PPE to Assets	0.1386***	0.1405***
PPE to Assets	(0.0122)	(0.0122)
CAPEX Ratio	−0.1199***	−0.1201***
CAPEX Ratio	(0.0277)	(0.0227)
Leverage	0.0094	0.0098
Leverage	(0.0106)	(0.0106)
ROA	0.2566***	0.2563***
ROA	(0.0225)	(0.0224)
Firm Size	0.0197***	0.0198***
Firm Size	(0.0015)	(0.0015)
Market to Book Equity	−0.0002**	−0.0002*
Market to Book Equity	(0.0000)	(0.0000)
Cash Flow to Assets	0.0385***	0.0379***
Cash Flow to Assets	(0.0133)	(0.0132)
Net Working Capital	0.0144	0.0146
Net Working Capital	(0.0134)	(0.0133)
Constant	−0.0374***	−0.0374***
Constant	(0.0114)	(0.0114)
Observations	26,798	26,798
Adjusted R-squared	0.1633	0.1613
Year FE	YES	YES
Industry FE	YES	YES

Dependent variable: average dividend payout ratio	(1)	(2)
BioRegulation	−0.0659***
BioRegulation	(0.0157)
BioCount		−0.0704***
BioCount		(0.0118)
PPE to Assets	0.1386***	0.1405***
PPE to Assets	(0.0122)	(0.0122)
CAPEX Ratio	−0.1199***	−0.1201***
CAPEX Ratio	(0.0277)	(0.0227)
Leverage	0.0094	0.0098
Leverage	(0.0106)	(0.0106)
ROA	0.2566***	0.2563***
ROA	(0.0225)	(0.0224)
Firm Size	0.0197***	0.0198***
Firm Size	(0.0015)	(0.0015)
Market to Book Equity	−0.0002**	−0.0002*
Market to Book Equity	(0.0000)	(0.0000)
Cash Flow to Assets	0.0385***	0.0379***
Cash Flow to Assets	(0.0133)	(0.0132)
Net Working Capital	0.0144	0.0146
Net Working Capital	(0.0134)	(0.0133)
Constant	−0.0374***	−0.0374***
Constant	(0.0114)	(0.0114)
Observations	26,798	26,798
Adjusted R-squared	0.1633	0.1613
Year FE	YES	YES
Industry FE	YES	YES

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Table A6

The effect of the 2015 Paris agreement signing

Dependent variable	(1)	(2)
Dependent variable	Ln (1 + dividend)	Dividend per share
Paris Agreement Signing × Regulation	−0.3719**	−0.1535**
Paris Agreement Signing × Regulation	(0.1850)	(0.0641)
Paris Agreement Signing	0.1313***	−0.0001
Paris Agreement Signing	(0.0321)	(0.0092)
Regulation	−0.4306***	−0.0214
Regulation	(0.1294)	(0.0554)
Constant	−4.2780***	−0.0328
Constant	(0.1015)	(0.0333)
Observations	6,034	6,015
Adjusted R-squared	0.4208	0.1031
Controls	YES	YES
Year FE	NO	NO
Industry FE	YES	YES

Dependent variable	(1)	(2)
Dependent variable	Ln (1 + dividend)	Dividend per share
Paris Agreement Signing × Regulation	−0.3719**	−0.1535**
Paris Agreement Signing × Regulation	(0.1850)	(0.0641)
Paris Agreement Signing	0.1313***	−0.0001
Paris Agreement Signing	(0.0321)	(0.0092)
Regulation	−0.4306***	−0.0214
Regulation	(0.1294)	(0.0554)
Constant	−4.2780***	−0.0328
Constant	(0.1015)	(0.0333)
Observations	6,034	6,015
Adjusted R-squared	0.4208	0.1031
Controls	YES	YES
Year FE	NO	NO
Industry FE	YES	YES

Note(s): This table shows result for the effect of the 2015 Paris Agreement Signing. The Paris Agreement Signing is a dummy variable for years 2015 onwards. Ln (1 + Dividend) is the dependent variable in specification 1, and Dividend Payout Ratio is the dependent variable in specification 2. Industry fixed effects are taken into account in both specifications. Appendix Table A1 provides an explanation of each variable. Robust standard errors, clustered at the firm level, are in parentheses. Significance at the 1%, 5%, and 10% levels is denoted by the symbols ***, **, and *, respectively

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