Category: Supply Chains & Retail

Why we need to transform commodity value chains (and what this means for cotton)

Why we need to transform commodity value chains (and what this means for cotton)

By Charlene Collison

When conditions in a system change to the point where it can’t cope, the system either dies or transforms. This is true for natural systems, and also for complex human-created systems like global value chains. The COVID-19 crisis is revealing cracks in commodity value chains, and society now has to make a choice: to persist with operating unsustainable supply chain models until they break; or to transform them.

Let’s take cotton: like many agricultural commodities, the cotton system is based on a production model that inherently lacks environmental and social resilience. Unless grown according to sustainable standards, cotton can guzzle increasingly precious water, pollute soils and ecosystems with excessive chemical fertilisers and pesticides, and leave farmers highly vulnerable. It often traps millions of smallholder farmers, who produce the majority of the world’s cotton (over 60%), in a cycle of poverty. In today’s mainstream cotton system, it is normal to pay a price which does not factor in the true environmental or social costs of production, and to award the largest share of profits to actors at the end of the value chain, leaving those who produce it without a living wage and bearing the majority of risk. Critically, the system functions under the assumption that commodities can easily and cheaply be transported around the world in a mobile, international economy.

Changing assumptions around globalised economies, open borders and global value chains

Crises reveal stresses that were already present in the system, but which have been ignored or tolerated because it was still possible for the system to function. COVID-19 is a wake-up call that the conditions required for globalised commodity systems such as cotton to work can no longer be taken for granted. We are already seeing these conditions arrested as apparel companies shut up shop in droves, leaving mills, factories and thousands of workers in their supply chains without support to survive until they re-open. Meanwhile, as anxious consumers invest in food and household essentials, apparel brands are seeing sales plummet, with one estimate predicting at least a 20% drop in brand value. Countries and regions are closing their borders to travel and to trade. Meanwhile, the price of cotton has fallen to record lows. 

Many less resilient, or harder hit actors across the supply chain will not survive this crisis. Scores of brands are already failing. We don’t yet know what the impact of COVID-19 on farming communities will be, as a lockdown is unfeasible for outdoor workers. Most farmers, already growing next season’s crop, lack the resources to cope with the fall in demand, and the continued price drop due to short term oversupply. This may be the year that food trumps fibre as farmers shift to more essential crops, causing devastating impacts on actors further up the supply chain, like ginners and spinners, on which production centres depend. Once lost, this essential infrastructure is unlikely to recover; the cotton system in some areas is likely to change beyond recognition.

More system shocks on the horizon

And this is just the beginning. The knock-on impacts of COVID-19, devastating as these are, are early tremors of a series of climate crises that will profoundly shake the operating conditions for commodities systems. The availability of water, and viable agricultural land, will be scarce. Competition for precious resources is likely to result in protectionist policies by struggling governments. Conflicts and war are likely to follow, interrupting the free flow of goods we now take for granted. With more than four trillion consumer products being made, shipped and sold across the globe each year, the scope of the problem is vast. With production capacity weakened, and the crunch of a major recession, the disruptions brought by climate change are almost certain to take many global commodities systems beyond breaking point.

When the first waves of the COVID-19 crisis is over, systems will not spring back to operate as they did before because the fundamental operating conditions they depend on will have changed. When conditions change, systems have to change with them. If they don’t, or can’t change far or fast enough, they collapse. 

We must grasp the difficult truth that the context for agricultural commodity systems will continue to change, often radically. For them to function in the future, we need to use a narrow window of opportunity to re-shape these commodity systems to be regenerative, distributive and resilient in a post-COVID and increasingly climate-changing world.

Future thinking: cotton scenarios

COVID-19 is showing us, as crises tend to do, that the status quo can take sudden and radical shifts that in times of normalcy we would never admit possible. This is a common experience at Forum for the Future, where for decades we’ve been working with futures thinking and scenarios, exploring them with our corporate and foundation partners to build understanding and prepare for risks and opportunities they may face across the various ways the future might play out. These scenarios are designed to explore plausible versions of the future which work under radically different conditions – including pandemics, closed borders and fortress economies. For those of us who have created and delved into the implications of these scenarios, experiencing the current COVID-19 world feels eerily and disconcertingly all-too-familiar.

Before COVID-19, asking people to question the assumptions that shaped the status quo was often met with polite sniggers of disbelief. Scenarios such as Fashion Futures 2030<2 °C Futures and Cotton 2040 included explorations of the polarities of a globalised, interconnected world vs a localised, fragmented one. They posed questions such as what the world might be like if the economy was no longer global, but nations closed ranks to operate in regional blocs. One of the Cotton 2040 scenarios explored what might happen if climate change or other disruptions meant cotton was no longer grown in certain regions of the world.

Yet once people suspended their disbelief to explore their risks and opportunities, the scenario planning process raised calls for vertically integrated supply chains, alternative sustainable and circular business models, industry-wide net positive and regenerative supply chain goals, and proactive cross-industry climate change planning. In a COVID-19 world, these possibilities no longer seem so far-fetched, but obvious and critical necessities.

Collaborative and radical system change

While we can’t predict the future, the evidence is all too clear that it will be characterised by disruptions, even more severe than the ones we are currently experiencing. This has far-reaching implications for how we need to re-structure our societies, expectations and way of life. For agricultural commodity value chains which provide so many of the basic products on which we depend, this means re-shaping for long term resilience. This level of change can only be achieved by a systemic, collaborative approach involving actors from across the supply chain.

This is why initiatives such as Cotton 2040 exist. Cotton 2040 is an ambitious collaborative initiative aiming to drive change in the cotton system so it can thrive and contribute positively to environmental, social and economic challenges in an increasingly disrupted world. It aims to accelerate progress and maximise the impact of existing sustainable cotton initiatives, bringing together leading international brands and retailers, sustainable cotton standards, and other stakeholders across the value chain. Facilitated by Forum for the Future, with funding from Laudes Foundation (formerly C&A Foundation), the platform envisages a sustainable global cotton industry which is resilient in a changing climate; which uses business models that support sustainable production and livelihoods; and where sustainably produced cotton is the norm.

Over the next three years (2020-2022), Cotton 2040 and its partners will deliver a set of three interconnected workstreams with the biggest potential to drive a systemic shift to mainstream sustainable cotton through collaborative efforts.

  1. Planning for climate adaptation: Creating sector-wide collaborative action to understand and adapt to the changing climate.
  2. Sourcing sustainable cotton: Driving the uptake of sustainable cotton with brands and​ retailers, building on the success of the CottonUP guide launched in 2018. 
  3. Developing sustainable business models: Supporting a widespread shift towards alternative business models which ensure fairer distribution of value and risk between stakeholders, and enable the regeneration of land and resources.

The immediate impact of COVID-19, like the disruptions that climate change will bring, is causing immense human suffering and hardship. It shows up the weaknesses of systems that were already not fit for purpose and will be less and less able to function in the context that is emerging. So much now depends on whether we learn from this lesson. We can create supply chains that help to regenerate the ecosystems and communities in which they are grown, which ensure those who produce them livelihoods they can rely on, and which meet society’s needs without borrowing from the future. There will be hard choices about what to take with us and what to leave behind. But we can make those choices, together, now, or wait until the next crisis to make them for us in ways that cause more suffering. We can change these critical systems so they work for all of us, but only if we act now, and together.

For more information about Cotton 2040, and Forum’s work in creating equitable, resilience value chains, contact Charlene Collison.


Cover photo by Mike Carberry, Cotton Australia
This article was originally posted on Forum For The Future.

Five ways to have a more climate-friendly holiday season

Five ways to have a more climate-friendly holiday season

By Georgina Wade

While the holiday season may be the most wonderful time of the year for most, it’s not always easy on the planet. Along with warmth and magic, this time of year also consists of consumerism, un-recyclable decorations, food waste, and lots of rubbish in general. This year more than most, it is a season for being thankful for what one has, so why not give to the environment this year by taking actions to have an eco-friendly (dare I say evergreen) Christmas? Here are some of the ways to do just that…

Be mindful when decorating

That plastic Santa you are contemplating getting for your front entrance – what are the chances it will end up in your bin a few Christmases down the line? If your answer is anywhere close to ‘maybe’, perhaps it is best that you forgo the Santa and opt for some décor that brings you so much joy that you see yourself struggling not to bring it out in the middle of July. If your decoration isn’t compostable or recyclable, it will head straight to the landfill to pollute the planet, eventually contaminating the soil and making its way into the environment, negatively affecting wildlife. Stick to decorations that are not only adorable but reusable. If you decide not to reuse an item, consider donating it instead of trashing it.

Use reused or reusable gift wrap

There is nothing quite like ripping into a gift and throwing the wrapping to the side as you ooh and ah at the marvels that are a fresh new pair of socks. However, that snowmen-laden paper is destined for the bin and will create a lot of waste when combined with all of the other wrapping heading towards the landfill. An easy way to reduce and green your holiday celebrations is to use reused or reusable gift wrap. Using old newspaper or making a collage out of magazines is an easy way to accomplish this. 

Buy less and experience more

You can greatly reduce your solid waste by simply buying less things! Whether it be a wine tasting, a pizza making class, a paint lessons or a dance class, the most sentimental gift you can give someone is time spent together – it also happens to be better for the environment. After all, there is a lot of catching up to do on this front once COVID is over!

Alternative Christmas trees

While pine and fir are some of the most evocative Christmas scent, holiday trees are only on display for a few weeks before ending up in the discard pile at the curb. Live trees that have been cut are a useful material for composting. Composting requires a carbon source and Christmas trees are just right for municipal operations which use chippers to shred the material. Look for tree drop-off locations in your neighbourhood. Artificial trees which are up for replacement can also be recycled. Another option is to create a Christmas tree alternative by decorating a potted plant or by purchasing a live potted tree.

Reduce your food waste

The holiday season can be a wasteful time in terms of food. In fact, a report by Unilever finds that each year in the UK the equivalent of 4 million Christmas dinners are wasted – the equivalent to 2 million turkeys, 74 million mince pies and 5 million Christmas puddings. One option is to buy less, but this can be tricky when guests are visiting for extended periods of time. This is where planning becomes essential.  If you are having a large Christmas gathering, plan how much food you will need for the number of people attending and stick to your list once you get to the supermarket. Avoid overcooking and make sure to get creative with those leftovers!


Cover photo by Chad Madden on Unsplash.
Rely on local food to ensure supply chains resilience

Rely on local food to ensure supply chains resilience

By Sonia Fernandez

The COVID-19 pandemic exposes weaknesses in the supply chain when countries go into lockdown. Some are small, such as the toilet paper shortages early on, that, while annoying, were eventually resolved. But what happens when the effects of the pandemic reach the food systems of countries highly reliant on food imports and income from abroad, and commerce slows to a halt?

UC Santa Barbara marine conservationist Jacob Eurich and collaborators watched this very situation unfold in the Pacific Island Countries and Territories (PICTs) — the island nations scattered in the middle of the Pacific Ocean, from New Zealand to French Polynesia, and including the Marshall Islands to Papua New Guinea. While infection with SARS-CoV-2 has been slow there relative to other parts of the world, the global lockdown can have outsized effects on their food systems.

“One of the key messages from the research is to rely less on global food supply chains,” said Eurich, a co-author on a paper that appears in the journal Food Security. While this study was specific to the PICT region, areas with few domestic alternatives to global supply chains, he noted, are vulnerable to similar threats to food security when shocks to the system occur.

With their remote locations, lack of arable land and economies dependent on tourism and need for food imports, the PICTs have become reliant on movement in and out of the region for much of the food they consume and also for the money to purchase that food.

But even with commerce slowing down, these countries and territories need not suffer food scarcity and malnutrition, the researchers said. The PICTs are home to large networks of coral reefs that host a diverse array of fish and other seafood.

“Coral reefs should operate as biodiverse, living refrigerators for coastal communities, sourcing replenishable, nutritious food,” Eurich said. “Coastal communities can and should be able to depend on traditionally-sourced diets if the resource is healthy.”

In fact, the time is ripe to reconsider the role of local production in the region’s food systems, according to the researchers. For instance, some areas with farmland could benefit by reinvigorating their production of root crops, which would not only decrease reliance on the global supply chain, but also provide healthy alternatives to imported processed foods.

“Bolstering local production and intraregional trade strengthens the food system,” he said. “Consuming more locally produced fresh foods and less non-perishable shelf-stable foods is a step in the right direction.”

Meanwhile, a shortening of the supply chain via strong intraregional trade could strengthen the regional economy while also protecting against food insecurity. Significant local processing and storage challenges must be overcome, according to the paper, and intra-island transport and food distribution strengthened. Particularly in the PICT region, where large scale local fish storage is currently inadequate, it helps to prioritize production of less perishable foods (like root crops) over fish, Eurich said.

It’s not just about pandemic planning. The same principles for resilient food systems in the face of climate change and natural disaster — both of which the PICTs have been facing — could serve as a basis for response to other COVID-19-type scenarios, according to the researchers.

“Climate change and natural disasters can be considered shocks to the system,” Eurich said. “The pandemic, while there was time to prepare, was still a shock. We have learned that enhancing storage, production and distribution through coordination and increasing regional transparency are keys of a resilient supply chain when these unexpected changes occur.”

Research on this paper was conducted also by Penny Farrell (lead author), Anne Marie Thow, Helen Trevena and Georgina Mulcahy at The University of Sydney; Jillian Tuto Wate at Worldfish; Nichol Nonga, Penina Vatucawaqa and Itziar Gonzalez at the Food and Agriculture Organization of the United Nations (FAO); Tom Brewer, Michael K. Sharp, Anna Farmery, Hampus Eriksson and Neil L. Andrew at the University of Wollongong; and Erica Reeve at Deakin University.

Download the pdf here.


This article was posted on PreventionWeb.
Cover photo by CIAT on ClimateVisuals.
From field to fork – global food supply and its dependence on resilient infrastructure

From field to fork – global food supply and its dependence on resilient infrastructure

Food security is increasingly a challenge for countries and governments worldwide. Of the food produced globally, 40% is wasted or lost, while more than 800 million people go to bed hungry every day.

“The global supply of food is an incredibly complex system, involving multiple actors and a diverse value chain from production through to consumption”, says Juliet Mian, Technical Director, Resilience Shift.

Food supply chains and their dependencies on infrastructure (adapted from Bartos et al)

“It relies on critical infrastructure throughout, in the form of water, energy, communication (digital and analogue), and transportation. Disruption to any part of any of these systems can cascade through to other parts of the supply chain and is likely to have unexpected consequences that are felt elsewhere in the world”, she explains.

The Jan/Feb issue (Vol.65 No.1) of Cereal Foods World includes a feature on ‘Resilience and complex interdependencies within and between global food supply networks and transportation infrastructure’. Authored by Juliet Mian, Jan Reier Huse, Xavier Aldea Borruel, and Vincent Doumeizel, Lloyd’s Register Foundation, with contribution from Brian Bedard, the paper is open access.

Resilience requires a whole systems approach and a focus on the end-to-end resilience of a system, not only the ability of one organisation to maintain business continuity. The resilience of transportation infrastructure (road, rail, marine, aviation) is often taken for granted—until it fails. In this article, evidence is drawn from different systems, geographies, and stakeholders to show how a more integrated approach can enhance the resilience of transportation infrastructure networks and, consequently, the global food supply chains that rely on them.

The food supply chain nexus of energy, water, transport.

The authors define food supply chain resilience and provide an overview of the view from industry. They expand on the following six principles for enhancing the resilience of food transportation systems that are relevant globally and throughout the supply chain:

  • Accepting complexity and recognising interdependencies
  • Creating a clear link between safety and resilience
  • Overcoming fragmentation in the supply chain
  • Adopting an ‘all hazards’ approach to resilience
  • Avoiding new, unintended, vulnerabilities related to technological innovations
  • Transferring knowledge between sectors

The article draws on  insights from Resilience Shift research into the resilience of global food supply chains carried out in 2019 through industry workshops.


This article was originally published on The Resilience Shift website.
Cover photo by Sigmar Schnur on Unsplash
2019 picks from the Acclimatise article archive – Food & Agriculture

2019 picks from the Acclimatise article archive – Food & Agriculture

Our fifth article of top picks from our 2019 article archive features four articles related to climate impacts on food and agriculture. Additionally, we have featured a fifth article pick that further explains the complex climate-conflict narrative.

The agricultural sector remains highly vulnerable to climate change impacts and has a direct implication on global security. In fact, climate change can disrupt food availability, reduce access to food, and affect production quality due to variations in precipitation patterns and extreme weather events. Further perpetuating the urgency of the matter, this heavy impact on food production comes at a time when there is increasing pressure from population and consumption growth.

To strengthen resilience and better manage climate shocks within the agricultural sector, adaptation remains vital. The agriculture sector must become better-suited to handle the challenges of a changing climate by sustainability increasing agricultural productivity whilst helping food systems adapt and build their resilience. Acclimatise has been and remains heavily involved in identifying the agricultural risks certain locations face, whilst providing a multitude of options in the reduction of climate change vulnerability and the enhancement of adaptive capacity.

India is waking up and smelling the coffee when it comes to climate change

By Devika Singh

Coffee has been fuelling our energy levels, productivity and the global economy for over 500 years now and remains one of the most valuable agricultural commodities traded internationally. However, coffee is a climate-sensitive crop. With falling coffee prices, increasing costs of production, changing climatic patterns, and the low profitability for producers, coffee production is becoming increasingly unprofitable.

Read the full here.

This New Climate – Episode 6: Sharing supply chain risk – Everyone’s a WINnER?

By Acclimatise News

In the sixth episode of This New Climate, host Will Bugler takes a deep dive into the intricate network of suppliers, traders and retailers that make up the food supply network. This episode explores how the risks of climate change are being disproportionately shouldered by smallholder famers, and presents an innovative project called WINnERS, that has helped farmers in Tanzania to share the cost of climate change more evenly across the supply chain.

Listen to the podcast here.

This New Climate – Episode 5: Climate change and the 4th agricultural revolution

By Acclimatise News

In the fifth episode of This New Climate, host Will Bugler explores a suite of innovations promoted by EIT Climate-KIC through their Climate Smart Agriculture Booster that are helping farmers to adapt to climate change while shedding light on how European farmers have suffered under recent drought conditions.

Listen to the podcast here.

Climate change adding to pressure on land threatening global food security finds landmark IPCC report

By Will Bugler

Climate change is undermining human’s ability to provide enough food as pressures on soils mount. At the same time, poor land use practices are increasing global greenhouse gas emissions driving climate change and making adaptation and resilience efforts more difficult. This stark warning comes from the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Climate Change and Land, released in August 2019.

Read the full article here.

Climate Wars: A Review on the Complex Climate-Conflict Narrative

By Erin Owain

Remarkable progress has since been made in the understanding of the climate-conflict nexus due to advancements in data availability, quality and analysis. But despite such developments, a recently published article reviewing the climate-conflict literature concluded that there still exists “a failure to converse on a single narrative”.

Read the full article here.


Climate change adding to pressure on land threatening global food security finds landmark IPCC report

Climate change adding to pressure on land threatening global food security finds landmark IPCC report

By Will Bugler

Climate change is undermining human’s ability to provide enough food as pressures on soils mount. At the same time, poor land use practices are increasing global greenhouse gas emissions driving climate change and making adaptation and resilience efforts more difficult. This stark warning comes from the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Climate Change and Land, released yesterday.

The report, which is the most comprehensive study ever undertaken into the land-climate system, shows that better land management has the potential to save huge amounts of greenhouse-gas emissions. However, the growing demand for food will mean that most land must remain productive, and therefore it will not be possible to limit global warming to 2˚C, let alone 1.5˚C through land management alone.

The report found that climate change is contributing to land degradation through increased rates of erosion and desertification. “In a future with more intensive rainfall the risk of soil erosion on croplands increases,” said Kiyoto Tanabe, Co-Chair of the Task Force on National Greenhouse Gas Inventories, “sustainable land management is a way to protect communities from the detrimental impacts of this soil erosion and landslides. However, there are limits to what can be done, so in other cases degradation might be irreversible,” he said.

The report provides some indications of the risks to land productivity from different levels of climate change. It finds that even at 1.5˚C of warming, there will be serious impacts on food and water security, making adaptation efforts essential. “New knowledge shows an increase in risks from dryland water scarcity, fire damage, permafrost degradation and food system instability, even for global warming of around 1.5°C,” said Valérie Masson-Delmotte, Co-Chair of IPCC Working Group I. “Very high risks related to permafrost degradation and food system instability are identified at 2°C of global warming,” she said.

The fact that many scientists believe 2˚C of warming is likely to be a best-case scenario, clearly indicates that adaptation efforts should consider the implications of climate change at 3˚C and 4˚C of warming.

The report indicates that climate change poses a direct threat to global efforts to improve nutrition and end hunger. It shows how climate change is affecting all four pillars of food security: availability (yield and production), access (prices and ability to obtain food), utilization (nutrition and cooking), and stability (disruptions to availability).

“Food security will be increasingly affected by future climate change through yield declines – especially in the tropics – increased prices, reduced nutrient quality, and supply chain disruptions,” said Priyadarshi Shukla, Co-Chair of IPCC Working Group III. “We will see different effects in different countries, but there will be more drastic impacts on low-income countries in Africa, Asia, Latin America and the Caribbean,” he said.

The report finds that to successfully feed the world population in the future, it is likely that dietary habits will need to change, shifting towards plan-based diets, and away from consumption of meats, especially beef, lamb and other ruminants.

The report also shows that there are ways to manage risks and reduce vulnerabilities in land and the food system, with positive results for communities’ resilience to extreme events. This can be the result of dietary changes or ensuring a variety of crops to prevent further land degradation and increase resilience to extreme or varying weather.

Download a copy of the report here.


Cover photo by James Baltz on Unsplash.
Popular consumer goods like fashion & coffee at risk from climate impacts

Popular consumer goods like fashion & coffee at risk from climate impacts

By Elisa Jiménez Alonso

Climate change is increasingly having an impact on our daily lives. While many might think of the impacts in terms of extreme and sudden weather events, many problems are creeping up on our society. Such is the issue with many popular consumer goods. We are used to seeing densely stocked shopping aisles full of food, beverages, clothing and much more. But without adaptation measures from the private sector, the landscape of consumer goods as we know it might change very quickly. In a recent episode of the “Material World” podcast, hosts Jenny Kaplan and Lindsey Rupp explore how climate change might affect the consumer universe and what that means for popular products.

Going to the supermarket and buying groceries feels very removed from the actual food production. Shelves are always stocked, and if a consumer in the UK wants to buy an avocado in January, they will easily find one. Agriculture and food production are very complicated because they create globally traded goods and shortages in one country can potentially have knock on effects all over the world.

That is also the case for coffee. Illy Caffé CEO Andrea Illy explains that in the short term, as global temperatures begin to rise, the areas where coffee can be grown will expand. This can be seen in California where coffee production is on the rise. In the long term, however, the total area suitable for coffee production will significantly decrease. Illy estimates that about 50% of suitable areas today will not be able to produce coffee by the end of the century. In some traditionally coffee producing countries stagnating yields and decreasing quality can already be observed today. Adaptation actions are necessary today to reduce the negative impacts as much as possible. Andrea Illy recommends three broad areas of action: adapting agricultural practices, diversifying cultivated plants, and migrating plantations to more suitable areas. These will require enormous resources in terms of investments, knowledge, infrastructure, and people.

Cotton is another plant that is sensitive to a changing climate. While increased CO2 concentrations in the atmosphere boost cotton’s growth, the growth boost also leads to increasing water and nutrient needs. With rising temperatures and changing rainfall patterns, water availability is set to fall in many regions. The devastating 2011 drought alone led to the abandonment of 55% of Texas’ cotton fields and an estimated loss of US$2.2 billion. Major fashion companies like H&M are starting to look into changing how they source cotton and other textiles. With all signs pointing towards a significant reduction of global cotton production, H&M have pledged to use 100% sustainably sourced or recycled materials by 2030, in 2016 the share was 26%.

While the private sector’s efforts to adapt to climate change are absolutely crucial for global resilience building, governments also have an important role to play. In the first half of the 20th century, the US experienced a devastating drought that led and unsustainable farming practices led to the so called “Dust Bowl” in the Great Plains. The government then rolled out massive efforts to conserve soil and restore destroyed lands. One such effort consisted of planting a huge belt of 200 million trees from the Canadian border to central Texas. Without interventions and support from the public and private sectors, adaptation efforts and climate resilience building will only be partially successful.


Cover photo by Kimberly Vardeman (CC BY 2.0).
Climate-sensitive ‘chokepoints’ threaten global food trade

Climate-sensitive ‘chokepoints’ threaten global food trade

By Gracie Pearsall

A recent report published by the UK think-tank, Chatham House, has identified 14 critical locations that, while integral to global food trade, are also extremely at risk to the effects of climate change. The report dubs these locations “chokepoints,” and analyzes how disruptions from climate change could impact the food security of millions of people.

All 14 chokepoints are junctions on the global food transport system. The chokepoints encompass areas such as maritime corridors, ports, and inland transport infrastructure. The global food trade relies heavily on these chokepoints. For example, more than half the world’s staple crops (wheat, maize, rice, soybean) and fertilizers pass through at least one of the maritime chokepoints identified.

Increasing chokepoint risks

These chokepoints are exposed to distinct risks and hazards. Weather events, such as flooding and drought, regularly reduce efficiency, and damage infrastructure. Security, conflicts, and political dynamics can also disrupt trade at these chokepoints. Additionally, chokepoints face institutional risks if authorities choose to close a port, or restrict exports and imports. All but one of the identified chokepoints have been closed or severely interrupted at least once in the last 15 years. This report found that closings and interruptions such as these will occur more frequently as chokepoints risks increase.

Aside from climate change, two trends are increasing the chokepoint risks. First, dependency on chokepoints is growing. For example, in 2000, only six percent of crops and fertilizers relied on one of the maritime chokepoints as the only viable transit route. Now, this figure has risen to ten percent. This dependency increases risks because it concentrates a major amount of crops and fertilizers in a small number of vulnerable locations.

Second, there is chronic underinvestment in the infrastructure at these chokepoints. Inadequate infrastructure leaves these locations ill-prepared to handle the growing volume of trade, and also limits the infrastructure’s capacity to become resilient to the changing climate. For example, frequent heavy rains often render Brazil’s muddy roadways impassable.  Likewise, US waterways and Gulf ports are old and congested, making them especially vulnerable to flooding, droughts, and hurricanes. Countries that rely on food imports, such as those in North Africa and the Middle East, will become especially vulnerable as weather hazards intensify and as the international food trade grows

Climate-related risks

The Chatham House report identifies climate change as the biggest risk to chokepoints. Climate change will act as a “hazard multiplier,” by amplifying the effects of all the afore-mentioned risks. Moreover, climate change will bring risks of its own. Climate change will increase the frequency of extreme and severe weather events, such as floods, droughts, heavy rainfall, and heatwaves, which will block chokepoints and harm infrastructure. For example, flooding hit US waterways in 2016, which completely stopped transit. During a 2015 heatwave, major US rail lines kinked and derailed several trains and stopped transit.

Slow on-set climate consequence further threatens chokepoint infrastructure. For example, sea level rise poses a huge risk to maritime corridors and ports, and will require significant adaptation responses. Furthermore, climate change acts as a driver of instability because climate-related stress exacerbates social and political climates, and fuels armed conflicts.

Dealing with the at-risk chokepoints

An example of a country successfully minimizing chokepoint risks is China. It imports a lot of food, but it has diversified supply routes. Although 87% of China’s grain imports travel through maritime chokepoints, only four percent move through chokepoints with no alternative routes. Chinese companies have also built railroads in South America as an alternative route to the Panama Canal (one of the 14 chokepoints). China’s actions epitomize the report’s recommended approach to handling increasing chokepoint risks.

In conclusion, the Chatham House report emphasizes the need to mitigate damage by investing in infrastructure at these chokepoints, and adapting to the risks by lessening reliance on the checkpoints. The report also advises governments and businesses to integrate chokepoint analysis into risk management planning, and create a “supply-sharing” network and plan, in case of chokepoint failure and trade emergency.


Cover photo: Maritime, coastal and inland chokepoints and major shipping routes identified in the report. Source: Chatham House.
Supply chains gain competitive advantages by becoming more climate resilient

Supply chains gain competitive advantages by becoming more climate resilient

By Maribel Hernandez, Senior Consultant at Acclimatise, and Svante Persson, Coordinator, PROADAPT/IDB

Can supply chains gain competitive advantages by becoming more climate resilient?

How can businesses, large and small, make their supply chains more climate resilient and simultaneously become more profitable? Almost any supply chain, but particularly those that are dependent on natural resources, will experience the impacts of a changing climate in all its parts. A recent study by Acclimatise for the IDB’s PROADAPT program, shows that assessing climate change risks and their effects helps businesses better understand their supply chains and strengthen their resilience, and in that process, give them a competitive advantage in the market.

PROADAPT was launched in 2013 and is co-sponsored by the Inter-American Development Bank (IDB) in partnership with the Nordic Development Fund to improve climate resilience among small and medium enterprises and to foster business opportunities to provide climate resilience solutions, or products and services that help buyers to reduce or transfer their vulnerability to climate risks. This study specifically looked at the effects on a dairy supply chain in Mexico.

Turning climate risks into opportunities

Climate change increases the occurrence of extreme weather events which means increased risks to business assets and operations. It can also reduce the availability and increase the price of certain inputs. Agrifood industries are particularly affected, as they are dependent on the climate. Contrary to what is commonly assumed, reducing these risks can lead to new opportunities. Companies that adapt their strategies become more resilient and thereby increase their competitiveness through more efficient production and cost reductions. The emergence of new products and solutions that improve climate resilience such as heat-resistant building material, drought resistant seeds, water harvesting services, low-drip irrigation, or new insurance schemes also generates new opportunities to local businesses.

Addressing climate change impacts on a supply chain

Being aware of climate change risks and their impacts on a company’s supply chain is the first step towards building climate resilience. The next step is to map the supply chain in detail, including geographic locations, to identify the most vulnerable parts of the chain and target the most appropriate adaptation measures. Finally, adaptation and resilience enhancing measures can be identified and prioritised, such as:

  • Mainstream climate change into the decision making processes and setting risk management procedures according to the identified vulnerabilities, etc.
  • Fine-tune the company’s supply strategy based on the analysis of the relative climate exposure of key commodities and suppliers; expand the supply to other possible suppliers and/or locations; switch to domestic suppliers to reduce risk inherent to long-distance transport logistics, etc.
  • Introduce institutional, commercial and financial arrangements, capacity building activities, awareness-raising and communication options, actions to support community development, social, economic and environmental sustainability, etc.

The implementation of climate adaptation measures can also have positive social and economic impacts on local economies through more sustainable businesses, technology transfers and new markets niches, which enable the development of new local technologies, products, and services at a lower price. Oftentimes, resilience improving measures also mean reducing carbon emissions, like for example biodigestors and clean energy, thus presenting a double benefit.

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Climate-related impacts on supply chains are widely acknowledged although large-scale action is still needed

Climate-related impacts on supply chains are widely acknowledged although large-scale action is still needed

By Caroline Fouvet

In the wake of the Paris Agreement, it is now recognised that the private sector must play a prominent role in tackling climate change. Insurers have to address a growing protection gapwhile investors should brace for both climate change’s financial repercussions and opportunities. That being said, to what extent could large supply chains also contribute to climate change adaptation and mitigation? Why is it crucial to take them into account when building a low-carbon, climate resilient economy?

Many large organisations have complex networks of direct and indirect suppliers. The Carbon Disclosure Project’s (CDP) latest report, Harnessing the power of purchasing for a sustainable future, takes stock of current businesses’ efforts to enhance the sustainability of their supply chains. CDP’s members, that include organisations like Bank of America, Endesa or Nestle, requested information from over 8 200 suppliers to gather data on their endeavours to reduce their environmental impact and increase supply chain resilience. Given these companies’ large spending on procurement – $2.7 trillion per year according to the report – they have a tremendous ability to weigh on their suppliers’ business practices.

Key report findings underscore that although 62% of suppliers expect climate-related impacts on their businesses within the next six years and 68% recognise positive opportunities from action on climate change, progress achieved so far is still insufficient. And why so? One of the main limits is that the overwhelming majority of businesses focus their sustainability efforts on areas within their direct control and overlook stakeholders such as key suppliers and customers. Moreover, only 22% of suppliers also engage with their own suppliers to reduce emissions.

According to the respondents, several obstacles hinder their involvement in implementing climate friendly practices throughout the whole supply chain. In addition to a lack of awareness regarding climate risks and opportunities, businesses cite investment and operational costs as major barriers. Identifying climate risks seems however to depend on suppliers’ geographical location, as a higher percentage of Chinese providers perceive climate-related risks on their business (87%) than Americans do (70%) for instance.

Raising awareness regarding climate opportunities seems to be key to draw a larger involvement of global suppliers. In 2016, those who cut their CO2 by 434 million tonnes, saved up to $12.4 million. Developing low-carbon technologies and services can hence help stakeholders improve their competitive position. Other advantages highlighted in the report include positive impacts on corporate reputation, sales, stock price and company’s ability to attract and retain top talents.

To encourage companies’ efforts, the report provides a framework for action within the supply chain. Based on a four-pronged approach, this methodology highlights the importance of understanding and quantifying climate impacts, setting a plan to address these, implementing the defined blueprint and learning from the interventions’ outcomes. Concrete examples, such as BMW’s strategic supplier engagement, are provided as existing good practices that could inspire businesses. The German car manufacturer has for instance integrated its supply chain approach into a group-wide corporate sustainability strategy. The group’s top 100 suppliers are assessed against key indicators (e.g. emission targets) which enable the company to track their year-on-year performance.

With a growing number of businesses committing themselves to improving supply chains’ sustainability, the case for action is becoming compelling. As the clock keeps ticking, the scale and pace of these sustainable corporate practices ought to be increased to meet the goals set in the Paris Agreement.

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