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Resilient Supply Chains

Farmers & Food Industry Tackle the Shared Challenge of Climate Change

A Strategic Dialogue

The Challenge

Climate change brings significant impacts for farmers and food companies alike.

Short Term

Income and Bottom Line Implications of More Volatility
  • In 2014 alone, Unilever lost $415 million due to extreme weather events including flooding and extreme cold.1
  • Cargill reported a 12% drop in 2014 4th-quarter profits as a 4-year drought in the U.S. Southwest damaged pastures used to raise beef.2
  • In 2013, coffee rust meant farmers in Central America lost up to half of their crops. It required costly remedial action and put many out of business.3

Medium Term

Increasing Costs & Regulatory Risk
  • More and more adverse growing conditions will increase production costs for farmers. Consequently, commodity prices will put pressure on the profit margins of packaged goods companies, as customers are unwilling to absorb higher prices.4
  • The number of climate change laws and policies has doubled every 5 years since 1997, with over 75% of global emissions now covered by economy-wide emission reduction targets.5
  • Under "business as usual", the agriculture and food sector alone is projected to produce 70% of a safe future global emission budget.6

Longer Term

Supply of Strategic Commodities Under Pressure
  • Severe frost damages led to a 60% surge in hazelnut prices in 2014. To mitigate persistent commodity cost increases, companies such as Ferrero acquired producers to secure their own supplies.7
  • Only 5% of ASDA’s fresh produce will not be affected by climate change. According to its CEO Paul Kelly, climate change is the biggest challenge the food industry currently faces.8

The Resilient Supply Chains Dialogue

The Event

Held on October 19th, 2015, in London, United Kingdom, the strategic dialogue highlighted concrete examples of how farmers and food companies can work together to build more resilient supply chains.
  • Companies shared their experience of deepening supply chain engagement.
  • Farmers described the impacts climate change has on their production and what is needed for them to continue to meet demand.

Who was There?

The event brought together more than 180 participants, including:
  • Senior managers, heads of units/departments and senior technical specialists from across supply chain management, procurement, sustainability and strategy units of food retailers, processors, traders and other agri-businesses.
  • Representatives of farmer groups from developed and developing countries.
  • Other stakeholders including development partners, civil society and academia.

The sessions

Sessions included interactive panels and structured collaborative formats to ensure the right conversations take place. There were also ample networking opportunities during breaks and meals.

At the end of the conference, participants had gained greater understanding of the challenges climate change brings for their companies - and how they can seize the opportunity to build resilient supply chains.

Program Overview

October 19th, 2015

MODERATION:
Charlotte Smith, BBC

Conference Material

Download the Presentations Download the proceedings

Should you have any questions or suggestions, feel free to contact us at ResilientSupplyChains@worldbank.org

Principal Partners

World Bank Group

Department for International Development

World Business Council for Sustainable Development

Financing Partners

Swiss Confederation

Ministry of Foreign Affairs Netherlands