Since the Industrial Revolution, the global economy has grown at an unprecedented rate (Figure 1). Technological progress, industrialisation and international trade have driven continuous increases in global gross domestic product (GDP). GDP and material wealth are now higher than ever before. This rapid economic development, however, has been closely tied to the large-scale extraction of natural resources. Fossil fuels have enabled large-scale industrial production and the transportation of goods, while timber extraction has supplied paper. Although a seemingly simple invention at first, paper facilitated legal documentation, bookkeeping, the spreading of religion and the furthering of scientific progress. Together, these developments contributed significantly to the development and expansion of the world economy. Additionally, large areas of forests have been cut down to make way for agricultural production. Crucial for the productivity of agriculture are pollinators. They can substantially increase crop yield and quality. For example, insect pollination increases the commercial value of fruits suitable for commercial sale by 92%.

Figure 1: Global GDP Over the Long Run

These examples illustrate a broader pattern: our economy is deeply embedded in natural capital and the extraction of natural resources. The list, showcasing how natural resources support economic growth, can go on for many pages. However, that is not the point of this article. Although our economy is thriving, the dependency on natural resources raises an urgent question. If continued overextraction leads to biodiversity loss and ecosystem degradation, what are the consequences for long-term economic stability and growth? This article presents arguments and examples that show biodiversity is not merely an environmental concern but a fundamental determinant of economic functioning, and that its decline poses significant risks to future economic growth and security.

The impact of biodiversity on economic activities

Many companies significantly depend on biodiversity in their operations or are significantly impacted by their proper functioning, although they may not immediately realize that. For instance, commercial fisheries depend on healthy marine ecosystems. If biodiversity declines and fish populations collapse, businesses in fishing, seafood processing, and retail lose a major source of supply. Indirectly, the companies that have invested in this branch also lose money. In the 2020 World Economic Forum (WEF) global risk report, biodiversity loss was rated as one of the top 5 greatest risks facing the global economic landscape in terms of likelihood and impact. A related report additionally recognized that a large amount of economic value, approximately the size of half the world’s GDP, is in some way moderately or highly dependent on the services that nature and other ecosystems provide. The relationship between biodiversity and economic activity becomes particularly clear when looking at global supply chains.

Biodiversity & ecosystem business risks

Supply chains are the systems through which raw materials, energy, and labour, are transformed into finished products and delivered to consumers. Biodiversity provides fundamental resources that economic systems depend on, including raw materials used in production and woven into global supply chains such as food, timber, medicinal resources and water. Indirectly, biodiversity also sustains the system in which production takes place. These processes include pollination, water purification, and buffers against climate disruptions such as floods.

Every supply chain therefore depends on biodiversity, and its degradation can have far-reaching economic consequences. One example of the impact of decaying biodiversity on supply chains is the loss of pollinators, such as butterflies and bats, or birds and bees. These significantly contribute to the crop yield in commercial agriculture. A loss of these animals therefore has significant negative consequences to global food supply chains. However, understanding how these nature systems affect business is sometimes hard to quantify. Many prices and costs are often hidden and incorrectly priced in long and complicated supply chains. Indirect benefits of ecosystems are often taken for granted and therefore not taken into account in the final price of products. For instance, less than half of the companies in the sample of a study knew which raw material they source depend on pollinators. There are, however, three main ways through which the destruction of biodiversity and ecosystems creates risks for businesses:

Dependency of business on nature; when businesses depend directly on nature for operations, supply chain performance, real estate asset values, physical security and business continuity

All businesses depend on natural capital assets and ecosystem services either directly or through their supply chains. For example, 60% of coffee varieties are in danger of extinction due to climate change, disease and deforestation. If this were to happen, global coffee markets that generated nearly $1500 bln in revenue in the retail and hospitality sector in 2025 would be significantly destabilized.

Fallout of business impacts on nature: when the direct and indirect impacts of business activities on nature loss trigger negative consequences, such as losing customers or entire markets, costly legal action and adverse regulatory changes

The negative impacts a business has on nature can create direct and indirect risks in the form of regulatory, legal, reputational, and market risks, among others. For example, consumers are increasingly aware of environmental damage a company causes which can result in reduced demand. Moreover, rating agencies have also started to include nature-related disclosures in their assessments of risk.

Impacts of nature loss on society: when nature loss aggravates the disruption of the society in which businesses operate, which in turn can create physical and market risks

The loss of nature can contribute to systemic geopolitical risk and, in some cases, destabilize the environment in which businesses operate. For example, strong links have been found between deforestation and outbreaks of animal transmitted diseases like Ebola.

These examples show that, to be able to maintain a sustainably growing economy, businesses should take into account the impact of biodiversity. Directly, through what resources they use and how their output impacts nature. Indirectly, through how the environment in which they operate changes due to the loss of nature and ecosystems.

The agricultural food sector is a line of business which is impacted through all three of the previously mentioned ways through which biodiversity can create risks for businesses. It depends on nature, directly impacts nature, and operates in a society in which nature loss can create physical and market risks.

The Birds, Bees, Flowers and Trees

In Europe, around four in five crop and wild-flowering plant species depend, at least to some extent, on animal pollination; the transfer of pollen from the male to female parts of the plant by creatures like insects, birds, and bats. The agricultural sector contributed approximately 1.2% to the European Union's GDP in 2024. This is approximately equal to €223.3 billion. And, around fifteen to thirty percent of the world’s food production is fertilized by pollinators such as bees, birds and bats. The benefits of pollination are therefore immensely large. Yet, the population of pollinators around the world has been declining at an alarming rate in terms of amount and diversity. A large part of them, around 16 to 40%, is already at risk of extinction.

So, what would the supermarket look like without pollinators? Since around 80% of crop and wild-flowering plant species depend on animal pollination, a supermarket without pollinators would look immensely different. We would notice a very large difference in the section of fruits and vegetables, coffee and tea, toiletries, and medicine. Supply would decrease, prices rise, and diets become less diverse. For example, a fruit that many people eat, apples, are significantly dependent on bee pollination. No pollinators means no apples, unless farmers would resort to costly manual pollination. The risk that the loss of pollinators poses to the global economy is therefore substantial.

Many developing countries in Asia and Africa often rely even more on agriculture for their GDP. As a result, they would face even greater consequences. Although biodiversity loss can substantially harm agricultural production, European economies are diversified, and rely on many other sectors for income. This significantly reduces their overall vulnerability and may prevent them from taking hard action. Services, for example, make up around 75 percent of GDP. Therefore, although significantly damaging to our economy ($223.3 bln is a lot of money), European countries may be better able to absorb the economic losses. However, in countries where agriculture is a major part of just the relatively small amount of wealth those countries earn, the loss of pollinators is an even larger threat.

This does not imply that European countries should not take action. The food and agriculture supply chain is only one example of the many sectors that are significantly dependent on biodiversity and ecosystems. Other examples are the fisheries, forestry, and also industries you may not expect to be dependent on them. One of them saves many human lives every day.

Pharmaceuticals

When thinking of modern medicine it might be easy to revert to the thought of biomedical laboratories that mix many chemicals together until they find the perfect mixture. While this is of course partly correct –contemporary drugs are mostly made in such labs– chemicals are not the only compound required to produce drugs. Many of the drugs significantly depend on natural resources, such as fungi or plants.

Natural products, for example, have afforded a rich source of compounds that have found many applications in cancer chemotherapy. Over 70% of anti-cancer compounds are either natural products, or natural product-derived substances. There is not just one study that points this out. Other studies find that one fourth of regular medicines are derived from tropical plants, and 50% of modern clinical drugs are of natural origin.

Besides that biodiversity significantly impacts health as a result of using nature-based solutions for medicines, this example again proves that a loss of biodiversity can significantly impact supply chains. In this case those of large pharmaceutical companies, but the consequences can extend much further. Reduced access to medicines can disrupt public health and therefore the broader economy in which many other businesses operate.

Since so many drugs are significantly dependent on nature, the loss of it reduces the availability of medicinal plants and decreases the solutions that doctors and researchers have to treat sick people. Do you still remember the three risks through which destruction of biodiversity and ecosystems can increase risks for businesses? One of them stated that natural loss can aggravate the disruption of society in which businesses operate. The loss of nature that is used to produce medicines may negatively affect public health systems and societal well-being. It is therefore notable that, although of second importance to health, the ways through which biodiversity loss impacts companies economically is not always straightforward.

Financial institutions

The impacts of biodiversity loss are not limited to producers within supply chains. Financial institutions, such as banks, investors, and insurers, are also exposed to these risks. Nature-related risks are caused by a loss of biodiversity and degradation of other natural ecosystems, and can lead to a substantial threat to financial stability and the broader economy. As nature declines, natural capital is damaged. This reduces nature's capacity to provide ecosystem services on which companies depend. These companies are either recipients of finance and investment, sources of tax revenue, and key links in supply chains. Their vulnerability to a decline in ecosystems is therefore a risk for investors, insurers, governments, and other connected companies and may therefore result in significant financial instability. These are physical risks. They capture the direct impacts of the loss of nature on the operation of businesses. There are also transition risks. Companies that currently have a substantial impact on nature and do not put in much effort to change could face reputational and transitional risks in the future. For example, governments can increase regulation, limiting extraction of natural resources. Businesses still heavily reliant on natural resources will then face significant costs. As a result, biodiversity loss not only threatens ecosystems, but also creates a serious threat to financial stability and long-term economic growth.

Jobs and money

Although biodiversity restoration is often regarded as a mere cost, it can in fact generate tangible economic returns and contribute significantly to economic growth in surrounding areas. There are many examples of nature restoration that have resulted in better biodiversity while simultaneously creating economic benefits. According to the European Commission, the return on investment of nature restoration in the EU is large; a €1 investment adds between approximately €8 and €38 in economic value, particularly in jobs, and economic growth due to tourism and a healthier environment to live in.

Emscher Landscape Park

An example of such an investment is the Emscher Landscape Park. In this park, located at the heart of Germany’s Ruhr area, once stood one of Europe’s largest industrialized areas. The area was dominated by large coal mines, huge furnaces for smelting iron and steel, and chemical plants. Even more shocking perhaps is the open water sewer system. Because underground sewers were difficult or nearly impossible due to the large amounts of mining in the area, waste water of these factories flowed right through concrete channels.

When the coal and steel industry collapsed in the mid- to late 20th century in Europe, the area was faced with a major economic downturn. Factories became abandoned, unemployment rates were high, and the land was polluted due to the many years of heavy industry.

To confront the heavily degraded area, the German state government of North Rhine-Westphalia, the German federal government, the European Union and several other institutions decided to make significant investments in the area. They created a large green area that now connects 20 different cities that has resulted in healthier ecosystems, cleaner water, and many environmental benefits.

Apart from the positive impact on ecosystems, water quality and urban regeneration, the project created more than 55,000 jobs in an area that was still faced with significant unemployment. It additionally created a place that is visited by approximately one million tourists every year, has raised property values and created several new places for innovation such as the Wirtschaftspark Gelsenskirchen. This has turned the place from an old industrialized decaying area to a place of innovation and a tourism hotspot with major biodiversity. The transformation is a great demonstration that nature restoration can simultaneously improve biodiversity, stimulate economic growth, and revitalize a previously declining region.

Concluding remarks

This article started by stating that the world economy has thrived over the past few decades, with wealth and welfare reaching the highest levels ever seen. Yet, sustaining this progress requires companies to be engaged more actively with biodiversity. This means not only responding to disruptions caused by biodiversity loss, but also preventing further degradation and actively contributing to restoration. Also, by engaging in practices that are not damaging to biodiversity.

The difficulty, however, lies in the nature of biodiversity itself. The benefits of investing in nature often extend beyond the firm that makes the investment. This results in a free-rider problem: firms that do not contribute can still benefit from restoration efforts undertaken by others. As a result, too little investment in biodiversity occurs, leading to market failure. Addressing this challenge requires economic mechanisms that reward companies that protect natural systems and discourages practices that lead to overextraction and environmental degradation. The next The Outside World-article, which will be published in two weeks, will therefore look into the effect of companies on biodiversity and why companies should care about biodiversity.

This article is part of The Outside World, ftrprf’s very own research center.

As changemakers, we believe that what happens in the outside world is the most powerful force shaping organizational strategy – and also the most underestimated. To do well, organizations need to understand what’s happening in the outside world. To do significantly better, they need to be aware of what it means for their future, their relations, their strategy, and their impact. We serve as a bridge between society and tailored strategy by analysing societal dynamics, global trends, and shifting public expectations with a multidisciplinary team of international analysts, excellent tooling, sophisticated AI, and a systems approach. This article is part of Q1 2026 research focus, which centers on biodiversity.

For more information, please contact theoutsideworld@ftrprf.com.

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Next articleThe Hidden Health Cost of Pesticide-Heavy Agriculture

The Netherlands is often framed as a global model of efficient agriculture: high yields, advanced greenhouse production, and one of the world’s largest agricultural export sectors. Much of this productivity is organised around specialised, simplified production systems that prioritise predictability and scale . In such systems, pesHow Pesticides Impact Humanticides do not just protect crops, they often substitute for ecological functions that diversified landscapes naturally provide: natural pest control, pollination support, and soil vitality . The debate around pesticides is therefore no longer limited to agricultural efficiency. It increasingly touches on biodiversity loss, water quality, and public health. What happens when chemicals applied to stabilise monocultures circulate through insects, soils, waterways, and food chains? What does it mean to simplify living systems at scale, not only in terms of human exposure, but in terms of the resilience of the planet itself, of which we are only a part? A realistic conversation starts with the incentives. Farmers are not spraying “for fun” or out of ignorance. Pesticides exist because disease and pest pressure can collapse yields, because supermarkets and export markets demand uniform quality, and because farm margins often leave little room for experimentation with risk . In short: pesticides are an economic stabiliser in a high-pressure system. This matters because it shifts the question from individual choices to system design: what kind of farming model makes chemical intervention feel like the safest option? In recent years, Dutch pesticide use has declined. Statistics Netherlands (CBS) reports that agriculture used 3.9 million kilograms of plant protection products in 2024. That is more than 22% lower than 2020, with use per hectare falling from 7.1 kg (2020) to 5.6 kg (2024). This signals that regulation and shifting practices can change behaviour . Pesticide dependence is tightly linked to biodiversity erosion . In more diverse landscapes, pests are partially controlled through ecological interactions: predators, parasites, crop diversity, and healthy soils. Monocultures remove much of this resilience . They create uniform habitats where pest outbreaks are more likely, and they reduce the populations of beneficial insects and soil organisms that normally regulate crop health. Over time, this can produce a feedback loop: as ecological control weakens, chemical control becomes more necessary, not less. This creates a paradox: biodiversity loss increases the demand for chemical control, and chemical control can accelerate biodiversity loss. Pesticides reach surrounding environments through several pathways: spray drift during application, runoff after rainfall, drainage through soil, and accumulation in sediments . The Netherlands has a dense network of ditches and canals. In many regions, agricultural plots are directly connected to surface water systems designed for drainage and water management. This interconnectedness means that substances applied to crops can enter water bodies within hours of rainfall events. The Dutch Water Authorities reports that approximately half of monitored surface water locations exceed environmental quality standards for at least one plant protection product . These exceedances are measured against the EU Water Framework Directive thresholds, which are designed to protect aquatic ecosystems. This matters beyond ecological targets because Dutch surface waters are closely tied to drinking water systems . When pesticides and their breakdown products enter rivers, canals, and groundwater, water companies must monitor and remove them before they reach consumers. That shifts part of the cost of pesticide-intensive production away from agriculture itself and into public infrastructure: monitoring systems, purification steps, and precautionary management of water sources. In other words, contamination does not vanish; it reappears as a downstream governance burden. In its 2024 annual report, the Board for the Authorisation of Plant Protection Products and Biocides (Ctgb) describes adopting a new approach to address substances that structurally exceed standards in surface water, while also adjusting assessments to incorporate new knowledge on endocrine-disrupting substances . One of the clearest Dutch examples comes from the flower-bulb region in Noord-Holland and Zuid-Holland. Flower bulbs are a flagship Dutch export product. To maintain visual perfection, bulb fields are treated repeatedly against fungi and pests. Flower bulbs are a high-value export commodity where cosmetic quality, free of blemish, uniform colour, size, and shape, is central to marketability. The National Institute for Public Health and the Environment (RIVM) studied residents living within 250 metres of bulb fields and compared them to residents living further away. The results showed measurable pesticide residues in air samples, house dust, and even in urine samples of nearby residents, including children. Residents living close to fields had higher internal concentrations than those living further away. The most difficult part of the pesticide debate is that its health consequences rarely appear as immediate crises . Unlike foodborne illness outbreaks or acute poisoning incidents, pesticide-related harm is more likely to operate through chronic exposure: low doses accumulated over years through food, drinking water, air drift, and household dust. This is precisely what makes it politically and scientifically contentious. Chronic exposure produces effects that are slow, probabilistic, and hard to isolate from other risk factors . Yet this does not make it insignificant. It makes it structurally difficult to govern. The Health Council of the Netherlands notes that international research has linked exposure to plant protection products to health outcomes including Parkinson’s disease and developmental disorders in children, while also stressing that Dutch evidence has not produced conclusive confirmation . One reason the health evidence remains contested is that exposure is chronic and multi-route. People are not exposed to one substance at one moment; they are exposed to changing mixtures over time through food, water, air and indoor dust. Even EU institutions acknowledge that measuring “real” exposure is difficult: in 2025, the European Commission’s Joint Research Centre explored new risk indicators aimed at better capturing potential pesticide exposure beyond existing metrics . The point is not that science is absent, but that governance tools are still catching up to how exposure actually happens. Systematic reviews of the public health literature have repeatedly linked pesticide exposure to long-term risks including neurodegenerative disorders, respiratory disease, metabolic disruption, and certain cancers, especially in occupational settings where exposure is sustained. These findings do not imply that every pesticide exposure translates into illness. But they do support a broader conclusion: pesticides are not biologically neutral, and long-term exposure has been associated with serious health outcomes across multiple studies. In the Dutch context, this matters because exposure is not limited to farmers. The RIVM flower-bulb study suggests that residential proximity can translate into measurable internal exposure, including among children, meaning that the boundaries between agricultural risk and public risk are more porous than the regulatory system often assumes . Endocrine disruption adds another layer of complexity. Hormonal systems govern growth, reproduction, metabolism, and neurodevelopment, and they can be sensitive to low-dose disturbances, particularly during vulnerable life stages such as pregnancy and early childhood. This is why endocrine-disrupting chemicals are increasingly treated as a special regulatory category: their effects may not follow the linear “higher dose, higher harm” logic that traditional toxicology relies on. A 2024 review on pesticides as endocrine disruptors highlights links between pesticide exposure and neurodevelopmental risks through disruptions to maternal and infant thyroid function, a hormonal pathway essential for brain development . This provides a plausible mechanism for why developmental outcomes appear repeatedly in epidemiological research, even when exposure is indirect and dispersed. A newer but increasingly relevant health pathway concerns the gut microbiome . Emerging research suggests that pesticide exposure can alter gut microbial composition and function, potentially contributing to metabolic dysregulation and immune imbalance. A review published in The ISME Journal argues that pesticide-driven microbiome shifts may influence health outcomes through the microbiota-gut-brain axis, linking environmental chemical exposure to neurological and behavioural effects. The parallel is hard to ignore: chemicals that simplify biodiversity in soils and water may also disrupt biodiversity inside the human body. Current pesticide regulation evaluates substances individually. In practice, people are exposed to mixtures of multiple substances through food, water, and air. Utrecht University has explicitly noted that we still do not know enough about the risks of exposure to multiple pesticides at once, highlighting a gap between regulatory evaluation and lived exposure conditions. The political consequence is that uncertainty becomes a public health condition in itself: society continues to operate under exposure regimes that cannot be fully quantified, while the costs of caution are framed as economic burdens on farmers rather than as investments in collective health. Pesticide exposure is uneven, rural residents, agricultural workers, and communities near sprayed fields face higher proximity risks. Meanwhile, the costs of pollution management are often absorbed collectively through water monitoring and treatment systems. Those with higher incomes can purchase partial “exits” – organic food and filtration technologies – while others remain locked into cheaper food markets with intensive production. If ecological safety becomes something individuals buy rather than something society protects, health becomes quietly stratified. Reducing pesticide dependence does not mean abandoning crop protection. It means shifting from chemical stabilisation to ecological resilience . Integrated pest management (IPM) combines targeted chemical use with crop rotation, pest monitoring, resistant varieties, habitat for natural enemies, and mechanical control. Precision application and buffer zones can reduce drift and water contamination. Biological controls can replace some fungicide and insecticide uses in specific crops. These approaches are not cost-free: they often require more labour, monitoring, and transition support for farmers. But they reframe the policy question. Instead of treating purification and monitoring as permanent “downstream fixes”, the aim becomes prevention upstream, lowering chemical loads in ecosystems so exposure pathways narrow at the source. A useful point of inspiration can be observed in Switzerland. Switzerland has built a longstanding “upstream” logic into its farm subsidy system through the Proof of Ecological Performance ( Ökologischer Leistungsnachweis , PEP). In Switzerland, access to direct payments is conditional on meeting ecological requirements across six domains, including biodiversity, crop rotation, soil protection and plant protection . This is not framed as a voluntary green add-on. It is presented as the baseline for good agricultural practice that public money supports. One requirement is especially relevant to pesticide dependence: farms must maintain a minimum proportion of land as Biodiversity Promotion Areas, commonly described as at least 7% of the agricultural area (with specific rules for certain special crops ). These areas include elements such as wildflower strips, hedgerows, extensive meadows and other habitat features designed to keep ecological functions present inside production landscapes rather than outside them . Why does this matter for pesticide use and health? Because it operationalises the idea that biodiversity is not only something agriculture impacts; it is something agriculture can use as a stabilising function. Swiss field research on “flower strips for beneficial insects” makes the mechanism visible: experiments found 40–53% lower densities of cereal-leaf beetles in adjacent winter wheat fields, alongside a 61% reduction in plant damage, compared to controls without flower strips . The point is not that flower strips are a magic substitute for all crop protection. The point is that, once ecological regulation is rebuilt, chemical intervention stops being the default insurance policy that simplified landscapes require. Switzerland shows what it looks like to treat pesticide reduction as a system design problem rather than a consumer morality play or a farmer-blame story. Switzerland’s model is essentially a governance choice: if the state already pays for agriculture, it can also require agriculture to maintain the ecological functions that reduce dependency on chemicals in the first place . This matters for public health because it tightens the exposure pathways that your water-infrastructure sections describe. Fewer routine applications mean fewer opportunities for spray drift into homes, fewer runoff events into ditches and canals, and less cumulative mixture exposure through food, air, dust and drinking water. Dutch pesticide use is declining, but the water system shows how deeply chemical farming remains embedded. The Netherlands is therefore facing a larger choice than the usual “farmers versus environmentalists” narrative suggests: whether it continues to treat pesticides as a structural stabiliser for simplified production, managing the consequences downstream through monitoring, purification, and ever-more complex risk assessment, or whether it invests upstream in the ecological conditions that make farming less chemically dependent in the first place. Switzerland offers a practical precedent for what that upstream logic can look like: when biodiversity is treated as agricultural infrastructure and made a baseline condition of public support, ecological regulation becomes part of how yields are stabilised, rather than something repaired after the fact. That shift will not happen through consumer virtue or farmer blame. It happens when the rules of the system change: when prevention is rewarded, when the most damaging substances become harder to justify, when landscapes are designed to narrow exposure pathways, and when public health and water infrastructure stop functioning as silent shock absorbers for an economic model built on chemical insurance. The Dutch food system is not only feeding the Netherlands; it is shaping the ecological conditions under which life persists; in soils, waters, insects, and bodies. So let’s keep our food, planet, body, and ecosystems healthy, shall we?

2026-02-23

The Hidden Health Cost of Pesticide-Heavy Agriculture

Biodiversity: The Foundation of Our Economy