New report: U.S. food retail sector faces $219 billion risk from pesticides

A new report commissioned by Friends of the Earth and carried out by Netherlands-based research group Profundo finds that the U.S. food retail sector’s use of pesticides on just four crops could result in $219 billion in financial, climate, and biodiversity risks between now and 2050. The report was released alongside Friends of the Earth’s 2024 annual retailer scorecard. The scorecard finds that companies have not done nearly enough to reduce their use of toxic pesticides while also highlighting industry leadership — Whole Foods [NASDAQ: AMZN], Kroger [NYSE: KR], and Meijer have released meaningful pesticide policies in the past year.

Given the vulnerability of food production to environmental disruption and likely further deregulation under the incoming Trump administration, these climate and biodiversity risks are significant not only for the companies themselves, but for Americans’ food security. As pesticide use kills off pollinators and devastates soil health, and climate change’s extreme droughts and floods harm farmland, growing crops may become more and more expensive — making it more and more difficult for Americans to afford basic foods. Without government action, the responsibility lies with companies to protect their own bottom lines and the U.S. food supply.

The new report analyzes the risks associated with continued pesticide use through 2050 on four crops that are embedded in products that generate an estimated 55% of U.S. food retailers’ sales: corn, soy, apples, and almonds. Apples and almonds are among the top crops sold directly to consumers. Corn and soy are the top crops processed into packaged foods and livestock feed for meat, dairy, and eggs.

By assessing potential losses in operations, financing, and reputation as well as external harms to the climate and biodiversity, Profundo finds that a value equal to nearly one-third (32%) of U.S. food retailers’ current equity — the total value of stock available to shareholders — would be lost if food retailers were held fully accountable for the risks. “A major part of the risk food retailers’ face is loss of reputation as reliable suppliers of healthy food for consumers — a risk which shareholders should take notice of,” said Gerard Rijk, equity analyst at Profundo.

The estimated costs include $4.5 billion in climate damage from the CO2-equivalent emissions associated with the production and use of pesticides. These findings signal the magnitude of harm but are likely an underestimate given that it is not possible to assess the full scope of damage nor the intrinsic value of a stable climate and biodiversity.

The report also identified $34 billion in biodiversity risks associated with pollinator-harming pesticides. Friends of the Earth’s 2024 Bee-Friendly Retailer Scorecard shows that major U.S. food retailers are increasingly acknowledging the role pesticides play in biodiversity loss. Since 2018, thirteen of the retailers ranked on the scorecard have established policies aimed at reducing toxic pesticides in their supply chains. Yet, despite this promising industry trend, efforts fall far short of what is needed to address this massive liability.

“Under the incoming Trump administration, the Environmental Protection Agency will likely do even less to mitigate the damage of pesticides, putting even more onus on companies to address the escalating risks,” said Kendra Klein, PhD, deputy director of science at Friends of the Earth. “Food retailers must urgently reduce their use of pesticides and advance organic and other ecologically regenerative approaches. They have the opportunity to lead in the fight against biodiversity collapse and climate change, helping to ensure Americans have continued access to healthy food.

The food sector is among the most vulnerable to the converging crises of biodiversity loss and climate change, and it is also a major contributor. Pesticides — a term that encompasses insecticides, herbicides, and fungicides — used in food retailer supply chains contribute directly to both crises. They are responsible for widespread harm to biodiversity, including pollinators, which are required to maintain a third of the food supply, and soil organisms, which are central to building healthy soil, sequestering carbon, conserving water, and improving farmers’ climate resilience. What’s more, pesticides are fossil fuels, the production and use of which are significant drivers of agriculture-related greenhouse gas emissions.

The report indicates three strategies food retailers can take to meaningfully address the risks that pesticides pose: support the expansion of organic farming in the US and beyond, support the non-organic growers they source from to eliminate use of pollinator-harming and highly hazardous pesticides by shifting to ecological farming methods that reduce the need for pesticides, and make agrochemical input reduction a central pillar of all “regenerative” and “climate-smart” agriculture initiatives.