Overview
Biodiversity underpins the health of our world. Its protection impacts all of us. Current estimates indicate the level of investment necessary to maintain biodiversity must increase by $700 billion per year. Mobilising sufficient private investment, at scale, is essential to bridging this gap. Global finance has a significant role to play in catalysing change, and innovative research led by financial economists is essential to supporting this role. Yet there are no studies in top tier finance journals that explore the important research questions necessary to tackle this.
About this initiative
To address this vacuum in published research, the Review of Finance and the Centre for Endowment Asset Management at the University of Cambridge launched a global research competition in 2024. The competition invited financial economists to submit project proposals to be considered for publication in the Review of Finance Special Issue on Biodiversity and Natural Resource Finance.
The first stage of this competition took place in April 2024 when 147 proposals were submitted for consideration. Ten of these project proposals were shortlisted and the authors were invited to present at a workshop hosted in Cambridge. The second stage took place at a conference in London in May 2025 when these authors returned to present their completed research. The research competition will conclude with the Special Issue on Biodiversity and Natural Resource Finance that will be published by the Review of Finance towards the end of 2025. An event to celebrate the launch of the journal’s Special Issue will be announced in due course.
Initiative convenors
Elroy Dimson
Professor of Finance and Director of Research at Cambridge Judge Business School, University of Cambridge, Co-Founder and Chairman of Centre for Endowment Asset Management
Laura Starks
Research Fellow (Finance), Cambridge Judge Business School
George Kozmetsky Centennial University Distinguished Chair at the McCombs School of Business, University of Texas at Austin
Marcin Kacperczyk
Professor of Finance, Imperial College London
- Patrick Bolton, Professor of Finance and Economics, Imperial College London
- Elroy Dimson, Professor of Finance, University of Cambridge, and Chairman of Centre for Endowment Asset Management (CEAM)
- Caroline Flammer, A. Barton Hepburn Professor of Economics, Columbia University, and Director of Sustainable Investing Research Initiative (SIRI), Columbia University
- Harrison Hong, John R. Eckel, Jr. Professor of Financial Economics, Columbia University
- Marcin Kacperczyk, Professor of Finance, Imperial College London
- Laura Starks, George Kozmetsky Centennial University Distinguished Chair, McCombs School of Business, University of Texas at Austin
Sarah Carter
CEAM Executive Director
Sarah Carter is Executive Director of the University of Cambridge’s Centre for Endowment Asset Management, and previously set up and managed the Master of Finance at Cambridge Judge Business School. Before that, she worked for Plan International and for the United Nations Association. She has undertaken PhD coursework and research at the University of Wales, Aberystwyth, and was awarded an MA with distinction in International Studies by Durham University and a BA (Hons) in Psychology by the University of Hertfordshire.
Merve Karakaş
CEAM Centre Manager
Merve is Centre Manager of the University of Cambridge’s Centre for Endowment Asset Management (CEAM). Prior to joining CEAM, she was practicing corporate law in Turkey as an in-house lawyer in Istanbul. Merve holds LLM in Economic Law from Galatasaray University, and LLB from Istanbul University.
Competition timeline
| 1 May 2024 | 15 Aug 2024 | 2 Sep 2024 | 9 Oct 2024 | 31 March 2025 | 12 May 2025 | November 2025 |
|---|---|---|---|---|---|---|
| Review of Finance launches call for proposals. | Deadline for proposal submission. | Successful proposals announced by Scientific Committee. | Successful candidates invited to discuss their proposals. | Deadline for first draft submission of research papers. | Candidates invited to present their findings. | Review of Finance Special Issue published. |
The shortlisted projects
147 proposals were submitted for consideration and ten were successfully shortlisted. These shortlisted proposals were presented at a research workshop in October 2024. The feedback and collaborative exchange of ideas that took place during this workshop supported the development of these proposals into active research projects. A conference was then held in May 2025 when the authors returned to present their research paper.
Our sincere thanks go to the discussants at both the workshop and conference, whose insightful feedback and expertise significantly enhanced the discussion of these papers and enriched the evolving knowledge and understanding for research carried out in the emerging sub-field of Biodiversity and Natural Resource Finance: Pat Akey, Jawad Addoum, Franklin Allen, Patrick Bolton, Mariano Massimiliano Croce, Claudia Custodia, Caroline Flammer, Oguzhan Karakas, Andew Karolyi, Philip Krueger, Markus Leippold, Jacopo Ponticelli, Claudio Rizzi, Jan Starmans, Michela Verardo, Constantine Yannelis, Olivier David Zerbib, Qifei Zhu.
Peter G. Iliev, Jennifer Liang, and Jess Cornaggia
This research aims to explore how biodiversity is reflected in the pricing of local real estate and agricultural land, and how this relationship has evolved over time in the United States. It quantifies the relationship between biodiversity and local asset values – specifically residential and agricultural real estate prices – by combining property-level biodiversity loss metrics (from CSIRO) and county-level species richness data (from NatureServe). It analyses over 63 million US property transactions from CoreLogic over a 21-year period between 2000 and 2021.
2
Biodiversity co-benefits in carbon markets? Evidence from voluntary offset projects
Zoey Yiyuan Zhou and Douglas Almond.
The main objective of this research is to provide the first large-scale, empirical assessment of whether nature-based carbon offset projects lead to measurable improvements in biodiversity outcomes. This is frequently claimed to be the case but rarely verified at scale. The dataset compiled for this research includes 29,974 voluntary carbon offset projects (2701 with geospatial data) and 419,267 carbon credit retirements. It’s the largest known dataset of its kind. It links this data with satellite-based biodiversity and land-use metrics, particularly the Human Influence Indexes, which captures habitat disturbance from human activity. and analyses the ecological outcomes of these carbon projects across space and time.
Massimo Guidolin, and Manuela Pedio.
This project investigates the link between biodiversity risk and commodity prices, addressing an underexplored area in financial economics. It examines whether investors demand a premium for commodities with high biodiversity exposure, as biodiversity loss – driven by deforestation for agricultural and energy production – exacerbates climate change in a reinforcing feedback loop. With emerging regulations targeting ecological preservation, such commodities may face significant transition risks. The study leverages innovative data and controls to isolate biodiversity risk from broader environmental risks, offering new insights into its impact on commodity pricing.
G. Andrew Karolyi, William W. Xiong, Hui Xu, and Sean S. Cao.
This research examines the effectiveness of venture capital financing for emerging biodiversity-focused startups, which differ from large public firms where biodiversity projects are secondary initiatives. It explores tools to improve funding outcomes. Social media is highlighted as a potential tool for overcoming challenges these ventures face, such as limited investor bases and the complexity of nature-related business models. The project uses data from platforms like Twitter, LinkedIn and investment sources like Crunchbase and PitchBook to study how social media can help engage investors and reduce information gaps.
5
Coastal housing markets and climate resilience: financial value of nature-based solutions
Ted Liu, Brook Constantz, Michael Beck, and Galina Hale.
This project quantifies the financial benefits of nature-based solutions to climate adaptation and aims to contribute to existing knowledge on pricing climate risks and identifying cost-effective risk reduction solutions. It focuses on the role that mangroves have on reducing home price declines and price variability following major hurricanes in 2004, 2012, and 2017. The project explores the private financial benefits of mangrove protection and the role of private funding as a key source for financing restoration projects.
Snorre Gjerde, Zacharias Sautner, Alexis Wegerich, and Alexander Wagner.
This project aims to explore how companies perceive and manage nature risks and how they interact with institutional investors on this issue. The survey themes include corporate exposure to nature risks, investor interest in these risks and nature-related disclosures. Distributed through a large asset owner to its portfolio companies, the survey provides early insights into corporate views and actions on emerging nature risks and their alignment with investor perspectives. The findings could assist regulators, investors and academics in shaping policies and models related to nature risks in corporate finance and asset pricing, as well as understanding the impact of investor engagement.
7
Do investors care about the rainforest? Evidence from voluntary carbon offsets around the world
Franklin Allen, Patrick Behr, Riccardo Cosenza, and Eric Nowak.
This project explores how investors respond to firms’ activities in the Voluntary Carbon Market (VCM) using a dataset covering VCM transactions and retirements from 2009 to 2023. Publicly listed firms primarily retire carbon credits linked to rainforest conservation projects, as deforestation is a key driver of climate change and biodiversity loss.
This project explores the impact of financing on biodiversity risks, focusing on endangered species, species richness, species protection, and data coverage. Using data from 13,919 biodiversity projects funded by 114 European agencies, the research distinguishes between public and private financing. The project also highlights the potential of biotechnology-focused projects to attract private investment, as these projects may generate future cash flows through ancillary technological applications.
Arthur Romec, Zacharias Sautner, , Alexander Wagner, and Alexandre Garel.
This project aims to quantify and understand how much firms rely on nature and ecosystem services and to explore the financial implications of that dependence. It constructs scalable, firm-level measures of nature dependence, known as NatureDep scores, for 26,595 listed firms from 115 countries over a 12-year period between 2010 and 2022. These scores combine firm-level revenue data with dependency materiality ratings from the ENCORE database to capture the extent to which a firm’s business activities rely on ecosystem services. The research analyses this data to explore what it means for risk, disclosure and investor behaviour.
Amir Akbari, Man Duy (Marty) Pham, Jing Yu, and Lilian Ng.
This project introduces a new Corporate Biodiversity Risk (CBR) measure to assess biodiversity risk and its financial impacts at the organisation/establishment level. CBR evaluates the proximity of corporate production sites to protected areas in the contiguous US to quantify risk. It uses data from 1990 to 2021.
Intiative events
This event will feature innovative research on the risks related to biodiversity loss and how to intermediate private financing flows to support the protection of biodiversity.
An opportunity for researchers, who have been shortlisted for the Review of Finance Biodiversity and Natural Resource Initiative, to receive feedback on proposals.
Supporters
We are grateful to the following organisations for the financial support that has enabled us to host this research competition.
