Climate risks in supply chain
Potential disruptions and challenges arise from the impact of climate change on the production, transport and distribution of goods and services. These risks have significant consequences for companies, e. g. higher costs, supply chain disruptions and reputational damage.
Climate risks in the supply chain
There are a number of risks that agricultural companies have to deal with. Crop failure and water scarcity are two of the most common risks that occur. Changes in temperature and rainfall patterns can affect crop yields, leading to potential shortages of raw materials and ingredients for the agricultural business. Reduced water availability due to droughts or changing rainfall patterns can impact irrigation systems and water-intensive agricultural practices. Another relatively important risk impacting the supply chain is the outbreak of pests and diseases. Climate change can alter the geographical distribution of pests and diseases, leading to an increased risk of pest infestation and crop damage. Climate-related events can lead to market fluctuations that affect the prices of agricultural commodities and impact the financial stability of the company.
Soil health reduces climate risks
Improving soil health can help reduce climate risks in the supply chain of an agricultural company. Healthy soil plays a crucial role in enhancing the resilience of agricultural systems to climate change impacts. Healthy soils have higher levels of organic matter, which helps sequester carbon from the atmosphere. This can contribute to mitigating climate change by reducing greenhouse gas emissions. Healthy soils with good structure and organic matter content have improved water retention capacity. This can help mitigate the impacts of droughts and water scarcity on crop production. Soils in good health situation support diverse microbial communities that facilitate nutrient cycling and availability to plants. This can reduce the dependency on synthetic fertilizers, which contribute to greenhouse gas emissions. Healthy soils with good structure and organic matter are more resistant to erosion, which can be exacerbated by extreme weather events. This helps protect the integrity of the supply chain by preserving land for cultivation.
Enhanced crop resilience
Healthy soils provide a favorable environment for plant growth, supporting strong and resilient crops that are better able to withstand climate-related stressors such as droughts, floods, and pest outbreaks. By adopting soil health management practices such as cover cropping, crop rotation, conservation tillage, and organic amendments, agricultural companies can improve the health and resilience of their soils, thereby reducing climate risks in the supply chain and promoting sustainable agriculture.