Abstract
This study presents the first large-scale empirical evidence of the negative externalities of corporate activities on biodiversity. We examine the impact on birds of firms managing earnings to meet benchmarks, based on prior findings that pollution increases when firms boost earnings to meet benchmarks. This setting aids identification as its effects are focused in space and time. We rely on a novel wildlife dataset that consists of over 200 million birdwatching diaries gathered from tens of thousands of locations across the United States, spanning the period from 2002 to 2018. We find a significant decrease in bird populations (abundance) around manufacturing plants during quarters when the parent firm meets or just beats consensus analyst forecasts. This decline in abundance persists over the long term and is not offset by birds relocating to adjacent areas. In addition to abundance declines, we also observe a lasting drop in the number of unique bird species (richness). Even though meeting earnings benchmarks seems an innocuous act of low economic or social consequence, documenting that its adverse effects extend from humans to wildlife carries important implications for sustainable development and biodiversity conservation.
