Pesticide Dependency: A Hidden Financial Risk—and an Opportunity to Build Resilient Food Systems
New IEHN investor guidance calls on food companies to address hazardous pesticide dependency as global leaders prepare to implement the UN’s 2035 targets.
As governments, industry, investors, and civil society prepare to convene in Geneva for the First International Conference of the UN Global Framework on Chemicals (GFC), a critical challenge is coming into focus: how do we move from international commitments to measurable reductions in the hazardous pesticides on which much of our food system is dependent on?
The Framework’s Target A7 calls for effective measures by 2035 to phase out highly hazardous pesticides in agriculture where risks remain unmanaged and safer, affordable alternatives are available, while also promoting the transition to those alternatives.
For investors and food companies, this is more than an environmental commitment. Pesticide dependency is an underrecognized financial risk—one that threatens agricultural productivity, supply chain resilience, and long-term enterprise value.
That is why the Investor Environmental Health Network (IEHN), a program of Clean Production Action, is launching Pesticide Reduction Recommendations for Food Systems Companies, new guidance designed to help investors assess how food retailers and manufacturers are managing pesticide-related risks and transitioning toward safer agricultural practices.
The hidden costs of pesticide dependency
Pesticides have contributed to agricultural productivity, but decades of reliance on highly hazardous pesticides and agrichemicals have created accumulating risks for human health, biodiversity, and the ecosystems that underpin food production.
Pesticides are a major driver of biodiversity decline, and research published in Science in 2025 found that applied pesticide toxicity has increased for most species groups globally. Meanwhile, an estimated $235 billion to $577 billion in annual global food production depends on pollinators.
The economic implications are significant. Systemiq estimates that pesticides and related chemicals in the food system generate approximately $2.2 trillion annually in human health costs and another $640 billion in environmental costs.
While these figures represent societal costs rather than direct corporate liabilities, they underscore the scale of harm that can translate into regulatory, legal, operational, and reputational risks.
We have already seen how chemical dependency can become a balance-sheet issue. Multibillion-dollar litigation involving glyphosate demonstrates how a widely used agricultural input can generate substantial financial liabilities, and dicamba-drift and chlorpyrifos cases have generated further liability across the value chain.
For food retailers and manufacturers, the risks of continued pesticide dependence also extend to sourcing disruptions, changing regulatory requirements, and the declining health of ecosystems essential to agricultural production.
The question for investors is no longer whether pesticide dependency creates risk, but whether companies are adequately measuring, managing, and reducing that exposure.
Regenerative agriculture’s missing metric
Food companies are increasingly embracing regenerative agriculture as a strategy to restore soil health, protect biodiversity, and strengthen supply chains.
Yet an important piece is missing.
A 2026 FAIRR assessment of 78 publicly listed agri-food companies found that none had established a pesticide reduction target within their regenerative agriculture programs.
This disconnect matters. Increasing regenerative acreage through practices such as cover cropping and no-till can deliver benefits, but these activities alone do not demonstrate that companies are reducing pesticide-related harm.
Without measurable pesticide reduction targets, companies risk perpetuating the very dependencies that undermine their nature and biodiversity commitments and the long-term resilience of their supply chains.
Turning global ambition into market action
The international community has established expectations for addressing the drivers of nature and biodiversity loss. The Kunming-Montreal Global Biodiversity Framework calls for reducing overall pesticide risk by at least half by 2030, and the Global Framework on Chemicals (GFC) establishes a complementary 2035 target addressing highly hazardous pesticides.
The GFC also explicitly recognizes the role of finance. Target D3 calls on the private sector, including financial institutions, to incorporate sound chemicals management into financial approaches and business models by 2030.
As the first GFC International Conference advances implementation, investors and companies have an opportunity to translate these global targets into practical strategies, capital investment, and measurable outcomes.
IEHN’s new guidance offers three recommendations:
1. Conduct a biodiversity and pesticide impact assessment: Starting with high-impact sourcing regions and product categories, assess biodiversity dependencies and impacts and pesticide use and risk across the value chain, evaluate the efficacy of regenerative agricultural practices in reducing pesticide dependence and risk, and disclose material impacts on ecosystems [1].
2. Adopt a comprehensive pesticide reduction strategy that is embedded in regenerative agriculture practices: Establish a strategy—with appropriate oversight, accountability, and resources—that sets timebound input- and practice-based targets aligned with the intended outcomes of the Global Biodiversity Framework and Global Framework on Chemicals, integrated into regenerative agriculture practices, and that ensures continuous evaluation for efficacy [2][3].
3. Incentivize and verify regenerative agriculture practices that deliver measurable pesticide reduction: Invest in farmer transition support, independently verified certification programs, and input-based and outcome-oriented metrics that demonstrate measurable pesticide use and risk reduction through regenerative agricultural practices [4]. These recommendations recognize that agricultural transitions take time and investment. Farmers need access to affordable alternatives, technical support, and market incentives to make change economically viable.
The objective is not simply to replace one agricultural input with another – it is to reduce hazardous chemical dependency while building more productive, resilient, and sustainable food systems.
The investor opportunity: Moving from risk recognition to action
Institutional investors have a critical role to play in driving the transition to more resilient and sustainable agricultural systems.
Through company engagement, investment analysis, and expectations for corporate disclosure, investors can encourage food companies to identify pesticide-related risks, establish credible transition plans, and invest in agricultural practices that protect both nature and long-term business value.
The recommendations in the IEHN guidance are not only about avoiding future liabilities, but about unlocking the economic value of safer agriculture—healthier soils, more resilient supply chains, reduced chemical dependency, and greater confidence in the sustainability of food production.
The transition also creates opportunities for innovation in safer crop protection, integrated pest management, and agricultural practices that reduce reliance on hazardous inputs.
The cost of inaction is becoming increasingly visible on corporate balance sheets and in the broader economy. The opportunity now is to make the transition to safer agriculture measurable, investable, and scalable.
As global leaders gather in Geneva, the challenge is to turn international ambition into implementation.
IEHN’s guidance is intended to help investors and companies take that next step—moving beyond broad commitments toward credible strategies that reduce pesticide dependency, protect biodiversity, and strengthen the long-term resilience of our food systems.
The 2035 target may be nine years away, but the investment decisions needed to achieve it must begin today.
Disclaimer
This blog and the accompanying guidance were developed with input from investors participating in IEHN’s Pesticide Reduction and Biodiversity Working Group. The views expressed do not necessarily represent those of individual investors or participating institutions. IEHN’s activities are conducted in accordance with applicable antitrust and competition laws. The guidance is intended to inform independent investor and corporate decision-making and does not call for coordinated investment decisions, collective commitments, or the exchange of competitively sensitive information.
[1] Aligned with EU CSRD (ESRS 2 SBM-3); Kunming-Montreal Global Biodiversity Framework (GBF); TNFD; SBTN; Nature Action 100.
[2] Aligned with EU CSRD (ESRS 2 IRO-1, E4-2); GBF; TNFD; Nature Action 100; Friends of the Earth Bee Friendly Scorecard.
[3] Aligned with EU CSRD (E4-4); GBF Target 7; Global Framework on Chemicals (GFC) Targets A3, A7; TNFD; SBTN; Nature Action 100; ChemSec ChemScore; Friends of the Earth Bee Friendly Scorecard; CPA Chemical Footprint Survey.
[4] Aligned with GBF Target 19; GFC Targets D1, D3, D4, E3; CPA Chemical Footprint Project Survey; ChemSec ChemScore.