Industry prospects on climatic impacts
Beyond regional exhibitions to the volatility of the climate and extreme weather conditions, the impacts of these risks on companies vary considerably to the other of all industries. Two notable sectors affected by a changing climate include:
Food, agro-industry and drink (Fab)
The volatility of the climate and violent weather events such as droughts and heat waves cause crops, reducing yields and the creation of food shortages. Studies suggest that at average, key crop yields have already decreased by around 5%.5 This trend is even more pronounced for luxury crops, this coffee and cocoa, which are particularly sensitive to temperature changes and generally come from countries faced with temperatures, droughts and extreme floods.
In Central America, coffee yields have decreased by more than 10%, which contributes to an increase of 40% on the other of coffee prices.6 Colombian farmers, who often lack financial insurance and security nets, face prolonged recovery periods after such events that lead to disturbances in the supply chain.
As prices for these cultures and others increase, The same goes for the risk of cargo. Agricultural expeditions are now more expensive and delays in the supply chain – partly caused by weather events – can exacerbate this risk, because agricultural shipments are vulnerable to deterioration.