Humankind’s ability to feed itself is under threat from a hastening climate emergency. Increases in extreme weather events such as hurricanes and floods, combined with the impact of biodiversity loss, are threatening to undermine our food security for decades to come unless we act now to adapt.
Evidence of increasing disruption from extreme weather is all around us. Eight major tropical storms in Southeast Asia last year played havoc across the region. The Dutch government, meanwhile, estimated that the Europe-wide drought in 2018 cost the Dutch agriculture sector up to 1.9 billion euros.
Climate change has already reduced crop yields such as wheat across the globe, and this will only worsen. Disruption from droughts, heatwaves, and storms will only become more common as climate change gathers pace.
This matters because so much of our food is sourced from producers on the other side of the planet. No company—or consumer—is an island. The world depends on a complex web of transnational corporations that account for 80% of global trade, according to the UN Conference on Trade and Development. This means supply-chain disruptions in one country can have far-reaching impacts on people and economies in other regions.
Droughts in 2010 in Russia, the world’s second-biggest supplier of barley, for example, caused dramatic price rises around the world within weeks, while a 2012 drought in the U.S. Midwest damaged crop yields and sent corn and soybean prices soaring.
Our global food system is affected by climate change in myriad ways, not least biodiversity. One million animal and plant species are at imminent risk of extinction, according to a recent UN report. Insects are already critically affected. They are vital to most ecosystems and a collapse here would have profound implications for pollination, fertile soil, and clean water, and with it worldwide production of fruit and vegetables. All this makes even more daunting the challenge of feeding a world population that the UN forecasts will hit nearly 10 billion by 2050.
Governments must lead on adaptation by setting climate-smart policies, but companies can create a critical difference as positive change cascades through supply chains. So how do they do this?
First, they must assess the risks they face. This process should look beyond risks to companies’ direct operations and consider climate impacts on downstream suppliers as well as customers. They should include consideration of climate hazards, such as extreme temperature variations and flooding, and make use of climate models instead of only relying on historical data.
Royal DSM, for example, regularly assesses the climate risks at its 130 production locations and 120 office and R&D locations worldwide to produce a detailed threat map. In areas facing drought, it works with local authorities to harvest water and campaign for resilient infrastructure to preempt problems.
Second, companies can work to find innovative solutions for the new markets that will emerge from climate adaptation efforts. PepsiCo, maker of Lay’s and Walkers potato chips, developed more sustainable varieties of potatoes that require less water and carbon input during growth.
Third, companies should think about how adaptation can be achieved in step with local development. In Rwanda, Africa Improved Foods, a public-private partnership with international support, purchases locally grown maize and other crops from smallholders to produce a nutritious “super cereal” for mothers and babies. This creates a regular and environmentally sustainable food supply, as well as gives farmers a guaranteed income.
Making supply chains both low-carbon and more resilient to climate change can also increase profits. According to the Carbon Disclosure Project, an environmental nonprofit, Kellogg, Bridgestone, and McDonald’s were among 115 companies that saved $19.3 billion in 2018 through actions to reduce supply-chain emissions.
Businesses all along the food supply chain, including producers and retailers, have a huge opportunity to leverage their purchasing power to improve physical climate-risk integration within their suppliers’ practices. In doing so, downstream companies will need to support upstream suppliers in their efforts to adapt. Acting to protect food supply can also help safeguard the livelihoods of millions of farmers, as well as the prosperity of developing countries.
As climate change accelerates, companies can no longer claim that an extreme weather event or land productivity loss was unforeseen. They must adapt now to survive, while pursuing plans to cut carbon emissions that take longer to bear fruit. If they do not, we will all suffer the consequences.
Feike Sijbesma is the CEO of global sciences company Royal DSM and a member of the Global Commission on Adaptation. Patrick Verkooijen is the CEO of the Global Center on Adaptation.
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