Asda says 95% of fresh produce is already at the risk from climate change which, alongside numerous other pressures, is having unprecedented effects on water resources both globally and locally. Retailers need to implement a range of adaptation measures to ensure the sustainability of supply chains, argues Paul Kelly of ASDA.
In ’What to do when we run out of water’ Kelly analyses water related business risks. He claims that the established tendency to see water everywhere – as an endless resource – is being increasingly challenged in many parts of the world.
Climate change is having impacts not only on the hydrological cycle, resulting in increased droughts and floods, but also on vital water resources and ecosystem services, such as the ability to regulate water quality through sedimentation. These pressures imply that now, more than ever, we are threatened by significant weather-related water stress and risks.
Consider, for example, the dire droughts in the Brazilian coffee belt, in Australia, Singapore and Malaysia and more recently California, as well as the intense floods we have recently had here at home. For businesses, the risk of these events means reduced resilience of supply chains and potential losses from commodity price hikes that follow sudden drops in agricultural production. An example is the 2012 drought in the US that led to the lowest maize annual yield since 2006, with widely discussed potential consequences on global food prices4.
We at ASDA, just like other businesses, have to cope with the risks of more pronounced seasonal weather fluctuations. In fact, our recent study (to be published this year), in line with IPCC guidelines, has shown that only 5% of our fresh produce supply chain is not at risk from future impacts of climate change.
There are tangible business incentives to urgently respond to these risks and guarantee the long-term ability of the food chain to meet market demand.