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To achieve the goals of the Kunming–Montreal Global Biodiversity Framework (KMGBF), agreed by Parties to the Convention on Biological Diversity, there is an urgent need to address the economic drivers of biodiversity loss. The KMGBF includes a target to encourage businesses and financial institutions to disclose their impacts and dependences on biodiversity. While transparent biodiversity disclosures could help shift business operations away from activities that harm biodiversity, the weak target wording implies voluntary and unstandardized disclosures, which tend to be low quality and ineffective. Moreover, examination of scientific and practical insights strongly indicates that the evolving strategy of disclosures led by businesses may prioritize short‐term business and investment interests while neglecting biodiversity outcomes and the wider systemic risks they pose. We argue that there is a risk of limited if not altogether perverse outcomes from the target, where businesses provide ambiguous disclosures that fail to reduce impacts on biodiversity, yet an increase in volume and frequency of disclosures suggests progress toward the target. Consequently, we advocate for a regulatory approach, supported by scientific engagement in the development of disclosure standards and associated policy indicators, to ensure that the emerging response to the KMGBF target on disclosures avoids perverse outcomes and instead results in positive impacts on biodiversity. [ABSTRACT FROM AUTHOR]