Crop Analysis

The climate data analysis within this study was carried out by Zurich Resilience Solutions (ZRS) utilising their proprietary climate data and risk analysis platform, Climate Spotlight. Climate Spotlight is an advanced climate risk analysis solution that comprises an interactive digital data platform to allow organisations to identify and quantify their exposure to climate hazards and pinpoint their assets most at risk of damage and disruption.

Focusing on four of the world’s major crops, ZRS have analysed how climate hazards, may evolve over the short- and medium-term in the three countries with the highest production yield for each crop type (based on FAOSTAT data). The crops (and countries) are:

Maize

(USA, China, Brazil)

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Sugar Beet

(France, Russia, USA)

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Barley

(Russia, Australia, France)

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Wheat

(China, India, Russia)

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The climate hazards included in the analysis are precipitation, windstorm, drought, hail, heatwave, and cold wave. The analysis focused on the SSP5-8.5 climate scenario (Shared Socioeconomic Pathway high-emissions scenario) since this represents the worst-case climate scenario and a conservative risk view, and the base and medium-term time horizons which represent 2020 and 2050 respectively. Hazards are categorised into low, medium, high, and very high hazard levels to support the interpretation and comparison of hazard severity. Hazard relative increase is also referenced looking at the increase in hazard severity from base to medium-term time horizons.

The results below are based on a selection of crop-growing regions representing the major locations where crops are grown. Other growing locations within each region or country may be relevant to the crop types and may have different climate hazard exposures to the locations selected for the analysis. The hazard level categories are based only on the hazard component of risk. Vulnerability factors, such as the varying susceptible levels that each crop has to different weather types, have not been factored in. The hazard models assume the weather events associated with each climate hazard can occur at any time during the year. However, the timing of the event throughout the year can result in varying impacts on each crop type.

Key insights:

All the analysed crops are highly exposed to heatwave and drought hazards. These hazards are projected to increase in both severity and frequency from the base to the medium-term.

0%

of crop-growing regions are currently exposed to high or very high heatwave hazard, increasing to 96% in the medium-term.

0%

of crop-growing regions are currently exposed to high or very high drought hazard, increasing to 80% in the medium-term.


Each crop has varying levels of exposure to hail, precipitation and wind hazard.

0%

of crop-growing regions are currently exposed to high or very high hail hazard, increasing to 40% in the medium-term.

0%

of crop-growing regions are currently exposed to high or very high precipitation hazard, increasing to 40% in the medium-term.

0%

of crop-growing regions are currently exposed to high or very high wind hazard, increasing to 17% in the medium-term.


Percentage of all crop growing locations exposed to each climate hazard, by hazard level:

See graph

Addressing supply chain risk

Managing climate risks within the supply chain is a crucial component of a business’s overall strategy to minimise loss and disruption from climate change. The number of organisations suffering supply chain disruptions is rising, according to the latest BCI Supply Chain Resilience Report 2024. As highlighted by the crop analysis in the previous section, adverse weather and natural disasters are a leading cause. Building climate resilience across supply chains is therefore becoming increasingly important.

Organisations need to map out their supply chains to gain visibility over the various tiers of suppliers, where they operate, as well as to assess the criticality of specific suppliers to their business processes. This will allow for more targeted risk mitigation measures.

Businesses need to assess and continually monitor climate change risks. There are tools and services available to support with supply chain climate risk management, such as Zurich Resilience Solution's Climate Spotlight which leverages Zurich’s proprietary climate data and industry expertise to transform location or asset information into deep climate risk insights.

Critical supply chain sites identified as highly exposed to climate hazards should be further assessed at a site-level to gain a clearer picture of the vulnerability and overall risk and evaluate whether adequate loss control measures are in place. For sites highly exposed to flooding, critical utilities should be positioned outside exposed areas (i.e. above design flood levels), if necessary permanent or mobile flood protections should be made available such as fixed/demountable flood barriers or backflow prevention valves, and it’s crucial that drainage assets are well maintained. For wind-related hazards, roof-top equipment must be adequately secured, roof and cladding conditions regularly monitored, and wind protections made available such as storm shutters. Further advice may be needed to protect production sites from wildfires, hail or other hazards that may cause loss and damage.

Whilst the process of adapting assets to be more climate resilient is more complicated at supplier sites in comparison to an organisation’s own assets, there are more strategic measures that can be considered, such as supplier training and awareness to ensure the importance of climate risk mitigation is understood and that everyone is equipped to contribute to risk reduction efforts.

Organisations should consider developing alternative strategies to maintain operation and continuity of their supply chain during severe weather events, including diversifying suppliers, optimising inventory levels, and improving communication channels.

Daniel Keir

Climate Resilience Specialist - Zurich Resilience Solutions

E: daniel.keir@uk.zurich.com

M: +44 (0) 7812 265274

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