5.1. Baseline Regression
The results in
Table 3 highlight that the establishment of a Green Finance Reform and Innovation Pilot Zone (
GFPZ) has a statistically and economically significant impact on corporate biodiversity concerns. The coefficient for
GFPZ is consistently negative and highly significant across all specifications, with a value of −0.405 for
BCfreq, −0.276 for
BCnwords, and −0.142 for
BChar in the baseline regressions. The statistical significance of these results, with t-values exceeding 4, suggests that the findings are robust. These results indicate that firms in cities designated as GFPZs exhibit fewer biodiversity-related disclosures.
In models including only firm-level control variables (Columns 1, 3, 5), the results show that older (Age) and larger (Size) firms possess more green patents (GPATENT), potentially have better board structures (Boards), exhibit higher bank dependence (BANKD), demonstrate better internal green governance performance (GGP), and show significantly higher levels of biodiversity disclosure. This indicates that factors such as corporate history, resource endowment, innovation capacity, governance quality, and the influence of key stakeholders (like banks) are important drivers of disclosure. Conversely, firms with higher profitability (ROA) and more concentrated ownership (Top1) disclose significantly less biodiversity information, which may reflect different operational priorities or focal points of shareholder oversight. Under this specification, financial leverage (LEV), market valuation (TQ), and institutional investor ownership (INST) do not show a significant direct impact on biodiversity disclosure. Furthermore, in addressing the specific institutional context of China, we explicitly controlled for whether a firm is a State-Owned Enterprise (SOE). Across all model specifications (Columns 1–6), State-Owned Enterprise (SOE) status does not show a statistically significant effect on the level of corporate biodiversity disclosure (whether measured by overall frequency, Chinese word frequency, or character ratio). The coefficients are very small in magnitude and inconsistent in sign, further indicating that, within the model specifications and sample of this study, SOE status itself is not an independent and significant factor in explaining the variation in biodiversity disclosure among companies.
When city-level control variables are included (Columns 2, 4, 6), the aforementioned firm-level findings remain largely robust, reaffirming the independent impact of firms’ own characteristics (such as size, governance, and innovation) on biodiversity disclosure. Meanwhile, city-level macroeconomic and environmental factors also demonstrate significant effects: firms located in cities with higher levels of economic development (LPGDP), higher industrial solid waste utilization rates (ISW), and more developed financial sectors (POP) tend to engage in greater biodiversity disclosure, possibly reflecting higher requirements stemming from regional development levels, environmental management capabilities, and financial market maturity. On the other hand, the higher the degree of industrialization (IND2GDP), industrial pollution (LDUST, LPM), and carbon emission levels (LMT) in a firm’s host city, the significantly lower its level of biodiversity disclosure, suggesting a shift in focus or avoidance behavior under different environmental pressure contexts. The impact of population density (LPDEN) is weaker and inconsistent, while the composite city environmental performance indicator (UEPL) constructed in this study does not show a significant effect after controlling for other specific variables.
These findings provide strong empirical support for our central hypothesis, H1, which posits that
GFPZ implementation is negatively associated with the level of corporate biodiversity disclosure. This seemingly counterintuitive result aligns with our integrated theoretical framework. GFPZs’ institutional pressures [
11], salient stakeholder demands [
12]—particularly from regulators and investors focused on quantifiable metrics emphasized in green finance literature [
1,
9]—and corporate legitimacy needs [
13] converge to drive firm behavior. Firms appear to prioritize conformity with the policy’s explicit, measurable (likely carbon-centered) objectives to satisfy key stakeholders and signal regulatory compliance efficiently. Biodiversity, being more complex and less standardized [
8], offers a less direct pathway to achieving this policy-specific legitimacy.
Therefore, the negative coefficient suggests a strategic prioritization effect: faced with targeted institutional pressures and stakeholder demands focused on specific (likely carbon-related) environmental goals, firms allocate their limited resources and attention to meeting these primary requirements. This occurs potentially at the expense of other environmental factors like biodiversity, leading to the observed reduction in disclosure. This finding highlights a trade-off between motivating specific environmental actions and encouraging broad environmental transparency.
Figure 1 illustrates the parallel trend test and dynamic treatment effect analysis. The graph shows that pre-treatment trends between the treated and control groups are parallel, satisfying the parallel trend assumption necessary for the difference-in-differences methodology. Post-policy implementation, the treated group diverges significantly, indicating a measurable impact of
GFPZ on biodiversity-related disclosures. The dynamic treatment effect captures changes over time, providing further robustness by visualizing the timing and magnitude of policy effects.
Figure 2 presents the placebo test results. The test assigns false treatment dates to firms and examines whether significant effects appear during these placebo periods. The graph shows no statistically significant changes in biodiversity disclosures during placebo periods, confirming that the observed effects in the main analysis are not random or driven by unrelated factors. This strengthens the causal interpretation of the GFPZ policy’s impact, ensuring the results are not influenced by spurious correlations.
5.2. Cross-Sectional Examination
The relationship between the establishment of a Green Finance Reform and Innovation Pilot Zone (
GFPZ) and corporate biodiversity concerns is likely heterogeneous across various dimensions due to firm-specific and regional factors influencing environmental behavior. For instance, firms with higher R&D intensity may have greater capacity to adapt to green policies by innovating environmentally friendly practices, leading to more biodiversity disclosures. R&D-intensive firms often possess the resources to integrate environmental considerations into their operations [
1]. Financial constraints may exacerbate this relationship, as firms facing greater financial limitations may have reduced capacity to invest in long-term environmental initiatives, prioritizing short-term financial stability. Furthermore, regional differences in environmental law enforcement could also drive heterogeneity, as stricter enforcement incentivizes firms to align with biodiversity goals. Stronger institutional frameworks often enhance corporate environmental engagement [
22]. These dimensions highlight that firm-specific characteristics, such as financial flexibility and innovation capacity, alongside external regulatory pressures, shape how firms respond to green finance policies. This conjecture suggests that policy effectiveness depends on the alignment of incentives with firms’ financial and operational realities and the regional enforcement of environmental standards.
The regression results in
Table 4 reveal significant heterogeneity in the relationship between
GFPZ and corporate biodiversity concerns across three dimensions: R&D intensity, financial constraints, and regional environmental law enforcement. In Panel A, the interaction term between
GFPZ and R&D intensity (
GFPZRDP) is positive and statistically significant at the 1% level for all biodiversity measures (e.g.,
BCfreq, BCnwords, and
BChar), suggesting that firms with greater R&D capacity exhibit a less negative relationship between
GFPZ and biodiversity disclosures. The moderating variable R&D intensity (
RDP) is the ratio of R&D personnel to total employees. In Panel B, the interaction term between
GFPZ and financial constraints (
GFPZW) is negative and significant at the 1% level, indicating that firms with stronger financial constraints are more negatively affected by GFPZ policies. Financial constraints are measured by the WW index. In Panel C, the interaction term between
GFPZ and regional environmental law enforcement (
GFPZBCP) is also positive and significant at the 5% level. This moderating variable (
BCP) captures the proportion of environmental terms in government work reports. These results highlight that firms’ financial flexibility, innovation capacity, and external regulatory pressures significantly influence their responses to green finance reforms.
The results in
Table 4 reveal significant heterogeneity in the GFPZ effect, providing further nuance consistent with our theoretical framework. The finding that higher R&D intensity mitigates the negative impact of
GFPZ on biodiversity disclosure (Panel A) suggests that innovative capacity enhances a firm’s ability to manage multiple environmental demands. Drawing on institutional theory, firms with strong R&D may possess superior capabilities to interpret and respond strategically to complex regulatory environments. This allows them to address core GFPZ requirements and maintain attention on broader issues like biodiversity [
1]. Stakeholder theory suggests R&D-intensive firms often operate in sectors with higher stakeholder expectations for comprehensive ESG performance, motivating them to maintain broader disclosures despite policy focus [
12]. From a legitimacy perspective, innovation can be leveraged to signal proactive environmental stewardship across multiple fronts, enhancing overall legitimacy beyond mere compliance [
13]. Conversely, the finding that financial constraints worsen the negative impact (Panel B) aligns with the resource constraints inherent in theoretical perspectives; firms lacking financial flexibility can pursue discretionary or complex disclosures like biodiversity less when faced with pressing, policy-driven mandates. Similarly, the mitigating effect of stricter regional environmental enforcement (Panel C) underscores the power of coercive institutional pressure; when the overall regulatory environment demands broad environmental accountability, firms are less likely to selectively reduce disclosures, even if specific policies emphasize certain areas [
22]. These variations highlight that the policy’s impact depends on firm capabilities and the broader institutional context.
5.3. Plausible Economic Mechanisms
This paper explores two plausible channels through which Green Finance Reform and Innovation Pilot Zones influence corporate biodiversity disclosure: carbon production intensity and green information disclosure quality. These mechanisms reflect trade-offs in corporate environmental priorities and the broader institutional constraints shaping disclosure behavior.
Carbon production intensity is a mediating factor, suggesting that firms prioritize carbon reduction efforts over biodiversity disclosures. This is consistent with prior research indicating that green finance policies often heavily emphasize climate change mitigation and carbon reduction targets [
1,
9]. This strong focus might compel firms to prioritize investments, actions, and reporting related to carbon performance. Policies often incentivize firms to adopt low-carbon technologies, which may divert attention and reporting from biodiversity-related concerns [
1]. Additionally, carbon metrics are more standardized and measurable, making them a more accessible target for firms seeking regulatory compliance [
9]. The second channel, green information disclosure quality, suggests that GFPZs influence biodiversity disclosure through firms’ overall ESG reporting practices. Prior research highlights that firms enhance sustainability disclosures when institutional pressures increase transparency requirements [
6]. However, biodiversity remains underrepresented compared to carbon-related disclosures due to the lack of standardized reporting frameworks. The emphasis on green finance policies may improve overall ESG reporting without necessarily increasing biodiversity-specific transparency.
The regression results in
Table 5 examine the mediating effects of carbon production intensity (
CPI) and green information disclosure quality (
GIDQ) in the relationship between Green Finance Reform and Innovation Pilot Zone (
GFPZ) and corporate biodiversity disclosures. First, in Panel A, the coefficient of
GFPZ on
CPI is 0.124 and statistically significant at the 10% level, indicating that firms located in GFPZs tend to exhibit slightly higher carbon productivity (lower carbon intensity). The second-stage regression demonstrates that
CPI negatively affects biodiversity disclosure metrics
BCfreq (−0.026),
BCnwords (−0.018), and
Bchar (−0.010), both significant at the 5% level. This suggests that firms with higher carbon productivity (lower intensity) disclose less about biodiversity.
CPI is the ratio of total carbon productivity relative to total assets, reflecting the extent of a firm’s carbon intensity. Second, Panel B examines
GIDQ as a potential channel. The coefficient of
GFPZ on
GIDQ is −0.053, which is significant at the 1% level, suggesting that
GFPZ reduces the overall quality of green information disclosure. Moreover,
GIDQ positively affects
BCfreq (0.240),
BCnwords (0.148), and
BChar (0.075), all significant at the 5% level. This implies that firms in GFPZ zones provide lower-quality green disclosures, reducing biodiversity-related transparency.
GIDQ is a textual analysis-based measure reflecting the quality of firms’ green disclosures, constructed by evaluating the frequency and depth of environmental reporting in corporate annual reports.
The observed trade-off between carbon reduction and biodiversity disclosures aligns with economic theories of corporate resource allocation. Firms face budgetary and managerial constraints when complying with environmental policies, leading them to prioritize regulatory requirements over voluntary sustainability efforts [
23]. Since GFPZ policies primarily emphasize carbon reduction and energy efficiency, firms in these zones are incentivized to shift ESG efforts toward compliance with carbon-related metrics, reducing attention to biodiversity concerns [
8]. From a financial perspective, firms may prioritize carbon-related disclosures as they directly impact access to green financing instruments, such as green bonds and sustainability-linked loans [
3]. Biodiversity, by contrast, lacks standardized financial incentives and remains a secondary concern in ESG reporting frameworks [
5]. The results suggest that, while green finance initiatives drive improvements in carbon efficiency, they may inadvertently discourage comprehensive environmental disclosures. The results confirm that
CPI and
GIDQ significantly mediate the relationship between
GFPZ and biodiversity disclosures, reinforcing the argument that green finance policies create environmental trade-offs.
5.4. Robustness Checks
The robustness checks aim to ensure the validity and reliability of the findings by addressing potential concerns such as omitted variable bias, measurement errors, and endogeneity. For example, excluding high-polluting industries checks whether the results are driven by sector-specific effects. Additionally, we use alternative model specifications to help address potential biases arising from unobserved industry-specific and region-specific factors. These checks strengthen confidence in the causal interpretation of the findings.
The robustness checks in
Table 6 verify the consistency and reliability of the results under different conditions. First, Panel A presents the regression results under alternative sampling criteria, showing that the establishment of a Green Finance Reform and Innovation Pilot Zone (
GFPZ) has a negative and statistically significant impact on corporate biodiversity concerns across all three measures (
BCfreq,
BCwords, and
BChar) at the 1% significance level. The result reinforces the robustness of the primary results. Second, Panel B incorporates industry-year and province-year fixed effects to further validate the robustness of the findings. The coefficients for
GFPZ remain negative and statistically significant at the 1% level across all three biodiversity concern measures, suggesting that green finance policies consistently reduce corporate biodiversity concerns, regardless of industry or regional differences, further supporting the robustness of the findings. These checks collectively confirm the validity of the causal relationship and rule out alternative explanations.
To mitigate selection bias and further validate the robustness of the baseline regression, this study employs propensity score matching (PSM) to match firms in a Green Finance Reform and Innovation Pilot Zone (GFPZ) with non-GFPZ firms, creating a more comparable control group. We use entropy balancing to ensure covariate balance between the treatment and control groups. The matching process incorporates firm-level and city-level control variables to estimate a firm’s propensity scores for GFPZ assignment.
The regression results in
Table 7 show that the coefficient for Green Finance Reform and Innovation Pilot Zones is negative after matching and statistically significant at the 5% level for all biodiversity disclosure measures (e.g.,
BCfreq,
BCnwords, and
BChar), suggesting that, even after controlling for selection bias,
GFPZ still significantly reduces corporate biodiversity disclosure, further confirming the robustness of the baseline regression. This finding reinforces the core argument of this study. While green finance policies effectively promote corporate low-carbon transitions, they may also lead firms to prioritize carbon reduction metrics over biodiversity transparency, especially when ESG resources are limited. Furthermore, the persistently significant negative impact after matching suggests that the reduction in biodiversity disclosure is not driven by firm-specific characteristics, but rather a systematic outcome of GFPZ policy incentives.