UK food system risks £2.6bn climate cost by 2050

UK Food System Risks £2.6bn Climate Cost by 2050, IGD Warns

A recent climate risk report from IGD, created in partnership with EY, highlights a concerning forecast: if the UK food system continues on its current path, it could incur an extra £2.6 billion in annual costs by 2050. This alarming figure is largely attributed to rising inflation and the unpredictable nature of climate change, emphasizing the steep price of failing to meet Net Zero targets.

This innovative climate risk model is designed to help business leaders and policymakers make smarter choices regarding investments, collaborations, and policies to protect the UK’s food supply through 2050. The assessment looks at three critical climate scenarios—Net Zero, delayed action, and Business as Usual—and examines how each could affect the productivity and costs of ten vital commodities: bananas, barley, citrus fruits, milk, potatoes, soy, sunflowers, tomatoes, wheat, and white fish.

This model is just the beginning of developing an open-access tool that will allow organizations throughout the supply chain to better understand their vulnerabilities and enhance their resilience against climate-related challenges.

Key Findings from the IGD Climate Risk Assessment

• £2.6bn Financial Impact from Business as Usual
  If we stick to our current practices, the UK could face an additional £2.6 billion in annual costs—a 5.9% rise in food commodity prices—making a strong case for speeding up our efforts toward achieving Net Zero.
  
• Imported Horticulture Faces Greatest Risk
  The UK’s heavy reliance on imported fruits and vegetables, especially citrus, bananas, and tomatoes, puts it at significant risk from climate disruptions.
  
• Dietary Shifts Could Expose Further Risks
  While moving towards healthier, more sustainable diets can help mitigate some issues, increasing the supply of fruits and vegetables from regions we currently depend on for imports could make us more vulnerable.
  
• New Sourcing Strategies Are Essential
  The biggest risks related to imports come from Spain, a key supplier. To lessen our reliance on climate-sensitive imports, it’s crucial to diversify our sourcing regions and invest in UK horticulture.
  
• Domestic Production Needs Our Protection
  Reaching Net Zero could actually give UK-grown wheat a competitive edge thanks to better local growing conditions. It's crucial to maintain and enhance our domestic production capabilities to take full advantage of these benefits.

A Call to Action

Sarah Bradbury, the Chief Executive of IGD, stressed that the choices we make today will shape the resilience and success of the UK’s food system in the future:

“Building resilience is not just essential for the environment; it’s also a business imperative. By working together, adapting, and effectively managing risks, the UK can ensure a sustainable and strong food future for everyone.”

Climate change is already transforming the UK’s food scene, with unprecedented heatwaves, flooding, and water shortages affecting crop yields and pushing prices higher. While the UK was the first country to lay out a Net Zero Transition Plan for its food system, IGD’s latest assessment underscores the pressing need for swift action from both the government and the industry.

Check out the full IGD report here:
IGD Climate Risk Assessment of the UK Food System