Assessment of the six largest pesticide companies’ approaches to addressing biodiversity loss
This assessment evaluates the approaches of six leading pesticide companies toward addressing biodiversity loss. None of the companies has committed to phasing out highly hazardous pesticides, and progress in reporting and disclosure is limited. Investors are urged to heed recommendations and use the report to guide engagements.
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OVERVIEW
Key findings
All six companies need to make significant changes in addressing pesticide-related biodiversity loss. Their methodology for impact assessment is exceptionally difficult to know the extent to which the development of outcomes is biased towards the companies’ interests. Moreover, a lack of alignment with international disclosure standards was found. None of the companies have committed to phasing out highly hazardous pesticides (HHPs), which are chemicals that have been explicitly recognised to have irreversible harmful effects on humans and the environment. Risk monitoring activities also failed to include HHPs highlighting the inadequate risk management processes to-date.
Assessment framework
The assessment framework covers seven key themes, including policies for responsible pesticide use, methodology for impact assessment, active ingredient management, supply chain management, developing safer and sustainable alternatives, managing at-risk locations, and biodiversity disclosures.
Company assessments
The company assessments provide a detailed analysis of each company’s approach to addressing biodiversity loss.
BASF receives a higher score in several areas, such as its commitment to reduce the risk of the most hazardous pesticides in its portfolio, evaluating active ingredient management, reporting against the European Union’s Sustainable Use Directive requirements on HHPs. However, there is a lack of transparency over the company’s approach to addressing biodiversity in supply chains.
Bayer’s poor performance shows that it has not taken sufficient action to address HHP categories, actively opposed regulatory changes, and failed to consider the downstream risks of its products. Furthermore, active ingredient management metrics were not clear, while disclosures showed poor alignment with widely recognised disclosure frameworks. Bayer’s lack of commitment in active ingredient replacements does not demonstrate a clear transition plan towards safer products.
Corteva’s assessment showed goodwill but did not meet several expectations. Corteva has not committed to phasing out HHPs and failed to report its annual sales volumes on HHPs. The company is not making sufficient efforts to develop safer and sustainable alternatives and lacks transparency on its approach to addressing biodiversity in its supply chains.
FMC Corporation’s unclear strategy raises concerns about the company’s commitments on reducing HHPs, managing at-risk locations, and measuring progress towards responsible development. Although FMC Corporation admitted that some products could harm biodiversity, there was a lack of clarity on active ingredient management, and metrics on product risk towards biodiversity were absent.
Syngenta has also failed to phase out the most harmful pesticides in line with Global Biodiversity Framework Target 15 and the Taskforce for Nature-related Financial Disclosures (TNFD). It also showed poor alignment with widely recognised disclosure frameworks, and active ingredient management metrics lacked clarity. Similarly, as with Corteva and Bayer, Syngenta has not been transparent about its approach to addressing biodiversity in supply chains.
UPL performed poorly in all areas but showed evidence of potential for improvements. The company has not disclosed sales volumes of HHPs, though some claim to be replacing hazardous products with lower-risk alternatives. However, UPL does not have a policy around sustainable innovation that includes this principle, nor does it monitor all its pesticide’s impacts. Supply chain management fell short of the expected alignment with environmental and social standards across HHP and the broader pesticide portfolio, while disclosures lacked transparency on the company’s approach to addressing biodiversity.
Investor recommendations
Investors can play a central role in ensuring companies in the pesticide industry align to global expectations to reduce risks related to biodiversity loss. The report recommends that investors encourage all six companies to establish and measure progress against commitments and targets that aim to reduce pesticide-related biodiversity loss, commit to phasing out HHPs, and align with Global Reporting Initiative 304 and TNFD disclosure frameworks.