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How to manage climate and extreme weather disruptions

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There is strong scientific consensus, confirmed by increasing experience from recent weather phenomena, that climate change, driven by human activity, is increasing the frequency and severity of extreme weather events in the UK and around the globe. These events, while hard to predict when they will happen, do have predictable impacts, and this means actions can be taken to reduce or avoid disruptions.   Businesses that assess their supply chain vulnerability can identify key risks (and opportunities) of a changing climate, and are better placed to mitigate or adapt to the threats, enabling them to recover quickly and continue operations efficiently with minimal disruption to security of supply. This article considers the latest political developments in climate agreements and outlines what businesses should be doing now to improve their climate resilience focussing on the agricultural raw material supply chain. 

How to manage climate and extreme weather disruptions

Climate talks aim for a universal, legally binding agreement

Climate talks due to be held in Paris later this year, the 21st session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) known as COP21, will play a key part in combating global climate change and influencing legislation. The talks need to achieve a new international agreement on the climate that is applicable to all countries and which keep global warming below 2°C. The intended result is a universal, legally binding agreement that will enable us to combat climate change effectively and boost the transition towards resilient, low-carbon societies and economies. However, regardless of the outcome, there will be implications to businesses and their supply chains, either through the implementation of new legislation, or through the threats and uncertainty presented by climate change and extreme weather.

Implications of a 2°C temperature increase for businesses and supply chains

The Intergovernmental Panel on Climate Change (IPCC) warns that a 2°C increase in global mean temperatures above pre-industrial levels will have disastrous and irreversible consequences for global climate systems. Given that almost a 1°C increase has already occurred, and we are locked into further warming due to greenhouse gas emissions entering the atmosphere today, it is almost certain that a 1.5-2°C increase is inevitable by the end of the century, even if comprehensive emission reduction measures are implemented imminently.

Whether a universally, legally binding agreement is attained or not, the impacts of observed and projected warming will continue to be felt worldwide. The impacts include an increase in the likelihood and severity of extreme weather events such as floods, heatwaves, droughts and storms. Furthermore, indirect impacts such as landslides, sea level rise and health impacts will also become increasingly problematic. This means that the sorts of events that we would expect periodically are likely to become much more frequent and even normal within the next few decades.

A recently published report ‘Climate change and business survival’ has demonstrated the severity of the situation, estimating that annual global economic losses resulting from climate change in 20 years’ time, if we don’t invest in climate resilience, will be in the region of £625 billion ($1 trillion USD). The justifiable annual cost of climate resilience is estimated to be £125 billion ($200 billion USD). This is based on the concept of an ‘80-20 rule’, which suggests it is cost-effective to protect against 80% of losses, with the remaining residual loss picked up by insurance, business and society as a whole.

Furthermore, another report by the Committee on Climate Change (CCC), a group of independent advisors to the UK Government and Parliament, has covered both progress towards meeting carbon budgets and progress on adaptation to climate change. The report included a statutory assessment of the National Adaptation Programme (NAP), which highlighted areas where progress has and hasn’t been made to manage climate vulnerability. A number of recommendations in the report for priority action going forward include: residual flood risk to existing properties; surface water flood management; heat-related health impacts; fertility of agricultural soils; and ecological condition of the farmed countryside.

Many, if not all, of these priorities will affect UK food and drink businesses in some way or other and the implications for businesses and their supply chains both locally and internationally, could be severe if climate risks are not identified in both the short and longer term, mitigated where possible, or adapted to in order to minimise the potential for damage or disruption.

Some of the impacts that a food and drink business or supply chain of agricultural produce might expect are:

  • River and surface water flooding causing the spread of pollution and damage to assets and agricultural produce.

  • Wind, rain and heat damage to transport infrastructure (e.g. roads and rail), energy supplies and other raw materials and resources, causing disruption across both local and international agricultural supply chains.

  • Heat stress and reduced productivity for outdoor workers, livestock and crops as a result of more frequent, intense and longer lasting heatwaves.

  • Storm and coastal flooding to businesses associated with increased sea levels.

  • Pest and disease pressures to crops and livestock associated with changes in seasonal variability reducing productivity and increasing price volatility.

  • Implications for water resource management due to changing rainfall patterns, with less frequent, but more intense rainfall events, and prolonged periods of drought.

Planning and preparation crucial to improving climate resilience

What can businesses do to tackle climate and extreme weather threats given the uncertainty around what may or may not happen? In essence there are two options. Firstly, the business as usual approach of ‘it may never happen’, then in the event of disruption, putting all resources possible into recovering back to a normal state – if even possible, at significant cost. The second approach, which demonstrates good corporate responsibility, can deliver short and long-term economic benefits and ensures security of supply, is to anticipate the types of threat to their business, assess the risks, take action where necessary and put recovery plans in place. The actions which can be taken to improve climate resilience for food and drink businesses and their supply chains include:

  1. Identifying climate threats through a climate change risk assessment;

  2. Preparing for threats through a climate change action plan;

  3. Respond to climate threats through mitigating where possible, or adapting to minimise the likelihood and/or severity of a threat occurring, thus increasing climate resilience;

  4. Recover from climate and extreme weather events quickly and efficiently.

Recent ADAS activities have included a review of the evidence base and design of a risk analysis tool to prioritise risks and identify actions for climate change adaptation in the agriculture and land use sectors in Wales; and advice and training to farmers to understand and manage the risks and opportunities to their business from climate change and extreme weather events in order to secure farm output, meet market requirements and prioritise actions that result in significant financial benefits.

Through applied research and work with farmer engagement, combined with  consultancy expertise in climate change and the agri-food industry (including crop and livestock production), ADAS are well placed to help businesses improve their resilience, providing the core knowledge and detail surrounding climate impacts and risk on agricultural supply chains.

What do we mean by climate resilience and what are the benefits?

A climate change risk assessment identifies and sets out the main threats and opportunities arising from climate change over a defined period and evaluates the risks for adaptation priorities. Adaptation is the adjustment or preparation of natural or human systems to a new or changing environment which moderates harm or exploits beneficial opportunities. Climate resilience is the capacity to anticipate, prepare for, respond to, and recover from significant climate threats. Businesses can improve their resilience through adaptation measures which minimise the impacts from climate threats on their business, workers, supply chain and the environment.

There are some very real and tangible short and long term benefits of a proactive approach to climate and extreme weather threats that businesses and their supply chains can make:

  • Avoid harm, damage or disruption to your assets, workforce and products/services.

  • Help management teams make informed strategic decisions to focus resources.

  • Rapid recovery from unexpected weather events through clear contingency plans.

  • Improved security of supply through well-versed communication with your supply chain.

  • Achieve a competitive edge through minimising the risk of adverse weather conditions disrupting your business and supply chain.

For more information on improving resilience to climate and extreme weather risks for your business, to discuss how a climate change risk assessment could help you to prepare, mitigate and adapt, or to improve communication and engagement in your company or supply chain, please visit ADAS’s Climate Change Adaptation and Business Resilience page or contact Charles Ffoulkes on charles.ffoulkes@adas.co.uk.

ADAS provides insight and solutions to businesses in the food and drink industry to help them develop and implement sustainability and resilience strategies. Our long history of engaging with the farming industry ensures our consultants understand the different drivers across the food chain, from pre-farm gate to consumer.

Information sources

Committee on Climate Change (2015) Reducing emissions and preparing for climate change: 2015 Progress Report to Parliament

COP21 (2015) UN climate change talks - Paris2015

Defra (2012) UK climate change risk assessment: Government report

Defra (2013) Adapting to climate change: national adaptation programme

Intergovernmental Panel on Climate Change (IPCC)

Mott MacDonald and GSI (2015) Climate change and business survival

 

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