Climate risk and adaptation in global food
The report outlines rising climate risks to global food supply chains, projecting up to $38 trillion in damages by 2050. It explores mitigation and adaptation strategies across crops, livestock, and fisheries, and highlights investor actions to build resilience, support sustainable practices, and adapt to shifting market, environmental, and regulatory conditions.
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OVERVIEW
Introduction
The report outlines significant climate risks and extreme weather hazards to the global food system, forecasting up to $38 trillion in damages by 2050. The world remains on a trajectory towards 2.5°C warming under current policies. Six key hazards—temperature extremes, heavy precipitation, flooding, droughts, extreme storms, and compound events—pose increasing threats to food value chains. Climate tipping points, such as ice sheet collapse or rainforest loss, further escalate risk.
Global food demand is expected to grow at 1.26% CAGR by 2033, outpacing population growth (0.7% CAGR), and creating pressure on an integrated food system. Crop, livestock, and fishery sectors are all affected, with distinct vulnerabilities and value chain dynamics.
Crop value chains
Crops accounted for over US$1.1 trillion in production value in 2023. Key commodities like sugarcane, maize, and wheat represent 40% of total volumes, with production concentrated in Brazil, India, and China—heightening exposure to regional climate risks. Crop-specific vulnerabilities include reliance on water, temperature ranges, soil quality, pest resistance, immobility, and post-harvest deterioration. For instance, sugarcane requires four times more water than wheat, and extreme rainfall in Kenya led to 35% aflatoxin contamination in maize.
Mitigation measures include responsible soil management, precision fertilisers, agroforestry, and clean energy use. Adaptation options include climate-resilient crop breeding, digital early warning systems, landscape barriers, and insurance products.
Livestock value chains
Livestock production reached over US$1 trillion in 2023, with milk comprising 63.5% of output. Livestock systems depend heavily on crop feed, especially maize, linking them to upstream climate risks. Unique vulnerabilities include water scarcity, disease outbreaks, and longer recovery times. For example, floods in Australia in 2019 led to 500,000 livestock deaths and US$3.7 billion in losses.
Mitigation strategies involve methane reduction via feed additives, improved feed efficiency, agroforestry, and clean energy. Adaptation includes breeding climate-resilient animals, diversified feed sources, protective infrastructure, and digital weather tracking. One dairy farm in Tasmania achieved a 25% methane reduction using seaweed-based feed.
Fishery value chains
Fishery production has grown at 2.48% CAGR since 2010, with aquaculture now accounting for 59% of output. Climate hazards disrupt water temperature, salinity, and breeding cycles, and can lead to migratory shifts and mortality. Ocean acidification further affects species like cod and salmon.
Adaptation and mitigation levers include feed efficiency, integrated multi-trophic aquaculture (IMTA), blue carbon projects, renewable energy, and recirculating aquaculture systems (RAS). For instance, a US$100 million RAS facility in Tasmania will recycle 99% of its water, enhancing resilience and efficiency.
Opportunities arising
Five shifts are reshaping agricultural markets:
- Geographic viability is expanding to new regions due to warming.
- Resilient species like goats and camels are replacing traditional livestock in some areas.
- Technology adoption (e.g. AI, IoT) is enhancing precision agriculture.
- Consumer preferences are shifting toward sustainable and health-conscious foods in high-income countries, while emerging markets show rising meat demand.
- Agricultural trade may face increased restrictions, making diversified supply and demand chains essential.
Actions for investors
Investors are advised to:
- Incorporate physical climate risks into investment decisions, including cross-value chain impacts.
- Support companies to disclose data across ten areas, including emissions, input price trends, nutrient density, and resource use.
- Engage actively across companies, industries, policymakers, and civil society to shape resilient and sustainable food systems.
Effective action will require alignment with disclosure standards (e.g. TNFD, TCFD, ISSB) and support for smallholder farmers, who produce ~30% of global food.
