Financial institutions should push to transform key pesticide companies and their significant contributions to global biodiversity loss, financial market campaigners ShareAction have urged.
The intensive use of pesticides in industrial agriculture is a major contributor to the nature crisis, damaging life on land and in water and threatening ecosystem services like pollination, water purification, and soil fertility.
Six companies – Syngenta, Bayer, Corteva Agriscience, BASF, FMC Corp., and UPL – control around 70% of the global pesticide market, and investors need to engage with those firms to drive industry reform and force a more sustainable food production system, ShareAction said in a report released this week.
“As owners and financers of companies in the pesticides industry, the financial sector’s role in driving change cannot be underestimated,” the group said.
While Syngenta is wholly owned by a Chinese state-owned chemicals company, ShareAction found that more than 2,000 investors own shares worth $10,000 or more in at least one of the other five companies.
Eighty-nine investors own shares in all five, according to the report, with BlackRock topping the list with a $12 billion stake, followed by State Street Global Advisors ($3.1 bln), Norges Bank Investment Management ($3 bln), DWS International ($1.8 bln), and Geode Capital Management ($1.6 bln).
All the involved investors should develop or expand their current assessment practices in line with the Global Biodiversity Framework to understand how their investments in the pesticide industry impacts biodiversity, and then develop a strategy to address those impacts, Share Action said.
They should also engage with policy-makers to advocate stricter regulations and help pesticide firms in their portfolio create or improve their existing biodiversity strategies, according to the group.
That would include aligning themselves with national and international targets, developing credible plans to reduce production of highly hazardous pesticides, and ensure their products are not sold to farms located near areas of biodiversity importance.
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But the problem with the pesticide industry, ShareAction argued, is not only the harmful impact on nature of many pesticides.
It said the industry’s narrative that those harmful pesticides are necessary to meet world demand for food is wrong, and that there are other options available, such as scaling up agroecological practises.
Further, it said many pesticide producers are involved in lobbying activities to block stricter industry regulations worldwide. Even in Europe, which has the most stringent regulations to date, lawmakers allow producers to export products globally even though they are banned from being used within Europe itself.
Much of that lobbying takes place through industry group CropLife International.
“In 2021, the group’s members spent €12 million on lobbying activities in Europe, targeting policies related to agriculture, sustainability, biodiversity, chemicals, and sustainable investment,” ShareAction said.
“The group has immense political influence in other jurisdictions, including in countries with large agriculture sectors like South Africa, Brazil, and the United States, where it continues to block regulation that could reduce the severe impacts of pesticide use on biodiversity and human health.”
ShareAction’s recommendations therefore said that in addition to push for pesticide producers to align themselves with GBF targets, improve data transparency, reporting procedures and so on, investors should also put pressure on the industry to disclose political donations and other information related to lobbying.
By Stian Reklev – stian@carbon-pulse.com
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