Nurturing nature: The role of green finance in reviving urban biodiversity

China's green finance (GF) policies have been progressively implemented and strengthened, positioning GF as a pivotal catalyst for biodiversity enhancement. This study employs the GF Innovation and Reform Zones as a quasi-experimental setting to examine the influence and underlying mechanisms of GF on biodiversity, utilizing data from 278 Chinese cities. The findings indicate that GF markedly improves urban biodiversity. Heterogeneity analysis reveals that GF positively impacts biodiversity in western cities, cities with advanced economic development, resource-centric cities, and small to medium-sized urban centers. Mechanism tests identify ecological value realization and climate change as key pathways through which GF augments biodiversity levels. Given the intricate nature and pressing need for biodiversity conservation, this study offers a theoretical framework for leveraging GF in biodiversity preservation efforts.