Managerial Myopia and Corporate Biodiversity Risk: Disclosure, Concern and Risk

Abstract Recent evidence shows that 70% of market participants view biodiversity risk as financially material, yet only 3.8% of firms provide meaningful biodiversity disclosure. We ask why this gap persists and whether managerial short‐termism explains it. Through the lens of agency theory, we argue that biodiversity is a boundary case where long horizons, opaque measurement and diffuse externalities make strategic underdisclosure rational for myopic managers. To test this argument, we analyse 1157 FTSE 350 annual reports from 2013 to 2023 and build three text‐based measures of corporate biodiversity engagement: Biodiversity Disclosure , Biodiversity Concern and a FinBERT‐derived Biodiversity Risk score that captures the negative‐sentiment intensity of disclosed biodiversity content. External validation against the Biodiversity Intactness Index reinforces our measures. Our analysis yields three findings. First, managerial myopia reduces Biodiversity Disclosure and Biodiversity Concern but raises Biodiversity Risk , a divergence we term strategic silence , and this pattern survives instrumental‐variable identification. Second, the effect is sharpest in low‐environmental‐sensitivity industries where regulatory oversight is the weakest. Third, executive equity holdings curb the substantive effect, while internationally diverse boards curb the disclosure effect. Taken together, these results suggest that closing the biodiversity‐disclosure gap requires aligning executive incentives and diversifying boards, not simply mandating more disclosure.