To best manage climate risk in a supply chain, companies need to be able to prioritize areas where resilience is critical for future supply security. While a global phenomenon, the specific disturbances associated with climate change vary across contexts with regard to type and severity.
Companies are often aware of the general risk of climate change and the need to take action. But even where specific projected climate effects are identified in particular sourcing areas, companies and their organizational partners are better able to make the case for investment if they understand not only the climate risk that farmers face and possible solutions, but also the financial risk for the company of not investing in climate resilience.
Tools to Help with risk diagnosis
Climate Suitability Maps
The International Center for Tropical Agriculture (CIAT) scientists have created a tiered risk framework based on the severity of likely impacts to crop suitability and commercial viability. To support climate change adaptation strategies CIAT developed a gradient of climate change impacts for coffee production by differentiating the different types of climates suitable for coffee production by clustering occurrence locations on a number of bioclimatic variables. The climate zones are described and ranked using their dry season characteristics, including its length, mean temperature and precipitation. The difference between current and the most likely future distribution results in the gradient of impacts, ranging from unsuitable without adaptation, to suitable with incremental farmer adaptation and suitable with substantial farmer adaptation.
For more information, take a closer look at CIAT’s 2018 report completed for the Alliance for Resilient Coffee on The impact of climate change on coffee production in Central America or for more information about climate suitability maps relating to other sourcing regions, please reach out directly to Christian Bunn (firstname.lastname@example.org).
Cost of Inaction
Is climate-smart agriculture worth the investment? Companies interested in the return on investment of climate-smart agriculture, should also consider the cost of inaction. While many believe climate-smart agriculture to be an expensive investment, the cost of not acting can result in much higher losses of income for farmers and the economy as well as overall losses of supply. CIAT scientists are currently working on Cost of Inaction studies pertaining to coffee. In the meantime, please see The Economic Case for Climate Action in West-African Cocoa Production for an insight as to how a similar study would be useful for coffee. For more information please reach out directly to Christian Bunn (email@example.com) or Mark Lundy (firstname.lastname@example.org)