04 Mar 21 | Podcast
As interest in the Paris climate talks grows, it’s time business properly understood climate impacts on security of raw material supply
As a backdrop, the world is already halfway towards the threshold that’s recognised as that which could result in the most dangerous impacts of climate change – a rise of 1C being recorded for the first time.
And the UN has announced that global annual concentrations of carbon are set to pass the 400 parts per million (ppm) mark sometime next year, reaching well above the scientifically decried 'safe' level of 350ppm.
It certainly adds more drama to COP21. It also calls further into question the level of urgency being shown, particularly by the business community
Examples of companies taking this seriously are thin on the ground. A recent report, produced by the luxury fashion group Kering – which owns brands such as Stella McCartney and Gucci – and Business for Social Responsibility was timely acknowledgement that climate change is real and that its impact will certainly be felt across the apparel sector (and, in fact, they already are).
Thanks to Kering’s impressive environmental profit and loss account (EP&L) work, it knows that nearly three-quarters of its environmental impact – including carbon emissions – sits at the base of its supply chain. To get a better understanding, it commissioned research to explore how exposed a number of its key raw materials are to climate change risk
Small producer struggle
The findings were stark. Climate change is already making it harder for luxury fashion brands to source raw materials – and it will only get harder as small-scale producers continue to struggle against increasingly harsh environmental and social conditions brought about by global warming. Extra fine cotton, vicuña, and cashmere face the biggest risks because of the limited geographic scope of their production regions and their dependence on natural systems.
Asda (part of Wal-Mart) carried out a similar supply chain mapping process with PwC in 2014. Using models practiced by the Intergovernmental Panel on Climate Change, it found that a staggering 95% of its fresh produce category is under threat from the impacts of a changing climate. Next its multiple-processed food product lines will be assessed, before working up plans to de-risk its supply chain.
But it is essential across many sectors – from food and pharma, to apparel and retail. Any business not taking proper steps to secure supply chains in a changing world need to wake up before it is too late.