Business on the Edge 2024

Data overview – agriculture, food and beverages system BOX 33.2 Agriculture, food and beverages socio-economic system Global food production Increased 54% from 2000-2021 and grew 29% faster than the number of people in the world.56 Single largest cause of biodiversity loss on land. Major driver of greenhouse gas emissions.Food systems Cause 80% of deforestation.57 Use around half of all habitable land and consume over 70% of available fresh water. Drive one-third of all human-made greenhouse gases58 – of which half attributed to livestock and fisheries.59Global agrifood market Employs 40% of the world’s workers. Accounts for ~12% of global GDP .60 Projected to be worth ~$12 trillion by 2027.61 Drought weakens crop yields and supply chains Droughts typically impact crop yields more severely than other climate hazards, due to their direct effect on soil moisture and plant health. Over 34% of crop and livestock production losses in low and middle- income countries can be traced to drought, costing the sector $37 billion overall.62 Moreover, prolonged lack of water can hinder global supply chains. The Panama Canal, crucial for 5% of global maritime trade, experienced more than a 30% decrease in rainwater during the rainy season of 2023 compared to the usual average.63 Daily access restrictions have resulted in delays that particularly affect perishable goods, causing food losses and driving material commodity price inflation. Tropical cyclones cause crop and livestock losses High winds and flooding from tropical cyclones cause crop and livestock losses and the destruction of food processing and distribution facilities. Soil degradation, higher insurance premiums and insufficient resourcing of disaster responses all damage food security and livelihoods. Extreme storms cost billions of dollars in crop and livestock losses globally.64 Cyclones can also damage energy grids and water systems. Power shortages at processing plants after a storm hit Texas in 2021 forced dairies to dump 14 million gallons of milk, causing a breakdown in supply.65 Extreme heat affects cold chains, staples and fish Extreme heat impacts the continuity and effectiveness of cold chains,66 increasing energy costs and food waste. In India, where only 6% of food is managed through cold chains, up to 35% of harvested food is lost due to inadequate storage and refrigeration.67 Globally, failure to provide appropriate temperature conditions results in the loss of 12-13% of the food supply, valued at approximately $379 billion annually68 – enough to feed around 1 billion people; more than the 750 million suffering from hunger in the world today.69,70 Warming temperatures diminish the efficiency of key staple foods, such as rice – a vital carbohydrate source for over half the global population – which can lose yield with a night-time temperature increase.71 Similarly, higher ocean temperatures are harming fish populations, causing shifts in species distribution and reproductive challenges, further undermining food security. By 2050, ensuring access to nutritious and affordable diets will be a major challenge, as extreme weather events heighten the risks of malnutrition72 and exacerbate social inequalities. Business on the Edge: Building Industry Resilience to Climate Hazards 27