Business on the Edge 2024

Consequences of climate hazards to the agriculture, food and beverages system FIGURE 13 Combined climate impacts on agriculture and food security The combined impacts of droughts, floods and heatwaves damage crops, reduce yields and disrupt the growing season. These hazards cause food waste and insecurity as well as economic losses, driving up prices and disrupting supply chains worldwide. In Honduras in 2020, a combination of drought, excessive rainfall and flooding caused catastrophic crop losses with a 50% drop in agricultural output. This led to increased food insecurity and compelled many people to migrate within and outside the country.73 Due to its significance and scale, the agriculture, food and beverages system has great potential to influence sustainable development on many levels, if it is resilient and effectively adapted to climate hazards. Supporting resilient food systems can help eliminate hunger, regional nutrient deficiencies and nature degradation. Annual financial losses caused by climate hazards on agricultural land in one of the world’s largest food producers, Brazil, could reach $23.3 billion by 2035, rising to $42.8 billion in 2055 under a high emissions scenario.74Extreme heat Wildfire Tropical cyclone Coastal flooding Fluvial flooding Water stress DroughtSourcingFormulation, processing & packagingLogistics & distributionSales & consumer preferences Land maintenance for crops, horticulture, cattle farming, animal welfare and productivity, fisheries and water sourcingIndustrial food and beverage formulation, processing and packagingTransportation models and infrastructureRetail and consumer choice Dominant hazards Crop lossesDamage to production infrastructure & machineryCold chain disruptions & food lossesDamage of physical assets Livestock exhaustion & lossesWater shortages & treatment interruptionsLivestock exhaustion & losses Reduced access to food Fish & seafood losses Higher energy use for cooling Transport disruption Reduced nutritional quality Soil degradation Supply chain delays Reduced labour productivityIncreased toxins in perishable goods Threats to worker safety, health & well-being Food waste Reduced pesticide effectiveness Changes in formulation due to reduced availability of ingredients, materials & resourcesDeterioration of packaging quality Water scarcity Increased demand for beverages Feed shortages for livestock Changing consumer preferences Business on the Edge: Building Industry Resilience to Climate Hazards 28