7 cases of emerging sustainability risks undermining commodities markets.
Strategic opportunities for companies and governments to collaborate to build resilience.
The recommendations are the Earth Security Group’s independent strategic analysis, drawing on industry, investment, political and civil society input from our unique cross-sector global network. The blueprints are intended to stimulate dialogue and alignment between industrialised and emerging economies, and between business and governments, on the recommended solutions to build resilience. The Earth Security Group plays a key independent role in taking some of these opportunities forward through its project and advisory engagements.
You can download and use each of the blueprints below and get in touch here for further interest.
“With rice as a critical determinant of global food security, a risk-based analysis helps companies ensure supply chain continuity and sustainability in our global food systems. The 2015 Earth Security Index rice blueprint offers a concise and practical tool for both private and public sector actors to identify threats and opportunities in an increasingly volatile sector.”
James Lomax, Chair, UN Sustainable Rice Platform.
Blueprint 1 – China’s soybean demand and South America’s deforestation.
China will be constrained in its ability to produce food due to diminishing arable land availability, water scarcity and pollution. A greater reliance on global markets to secure agricultural supplies is increasingly inevitable. In order to gain greater control over global sourcing prices and decisions, China is moving to compete directly with global commodity trading companies by investing in their competitors.
Blueprint 2 – The impact of Germany’s energy revolution on Russia and Turkey.
Germany’s energy transition towards efficiency and renewables – its energiewende – can help Europe improve its long-term leverage over Russia while strengthening energy transit hubs such as Turkey, which are strategic to Europe’s energy future.
Blueprint 3 – India and Nigeria’s rice business as a driver of their food security.
Rice is a vital crop for food security that is grown by producing countries for domestic consumption. Only 7% of the world’s rice production is traded globally. When the Indian government banned rice exports in the wake of the global food crisis of 2008, import dependent countries like Nigeria were driven to reconsider their dependence. Nigeria adopted the ambitious goal of achieving self-sufficiency by 2015, setting import tariffs to stimulate the growth of its domestic agriculture sector.
“The Earth Security Index is shining a new light on more integrated solutions for the future. This is a very innovative tool that helps companies consider global resource inter-dependencies and future risks, and make better decisions to invest in sustainability.”
Valeria Militelli, Head of Corporate Affairs, Cargill Brazil.
Blueprint 4 – Switzerland’s dependence on West Africa’s cocoa.
The taste for chocolate in emerging markets will continue to increase the global demand for cocoa. However, supply shortages of this pressured commodity are expected as early as 2020. Ghana and Côte d’Ivoire are the world’s largest producers of cocoa, providing 60% of global supplies. Yet most of the hundreds of thousands of smallholder farmers supplying the world’s cocoa have never tasted a bar of chocolate and live in poverty under worsening environmental conditions.
Blueprint 5 – South East Asia’s transboundary haze: health risk liabilities.
Air pollution from haze is a serious public health concern in Singapore. The haze primarily originates in Indonesia’s forest fires that are used to clear land for agriculture. Singapore will be increasingly pressured to act to reduce air pollution as health risks undermine the quality of life of its population and its ambition to be a leading global commodities hub. Indonesia’s new president Joko Widodo has made poverty reduction the centrepiece of his term’s vision. Forest fires affect the health of Indonesian rural communities and undercut his presidential pledge, resulting in his recent pronouncement against mono-crop corporate agriculture.
Blueprint 6 – Converging interests in the Nile basin around food security.
There is not enough water in the Nile to ensure water and food security for the growing populations of Egypt, Ethiopia, and Sudan unless they improve water cooperation. Ethiopia’s mega-plans to develop hydropower to meet its energy needs and Egypt’s colonial-era claim for water rights and veto power over the basin’s development have resulted in deadlock in negotiations over a cooperation agreement.
Blueprint 7 – Mexico’s food security and climate change in the USA.
Mexico’s rise as a manufacturing superpower has happened in tandem with a shift to increased dependency on the United States of America for agricultural imports, in particular the country’s main food staple, corn. However, food price volatility and climate change in North America have created shocks to corn availability, leading to food riots in Mexico. In 2015, Mexico will deepen its leadership role in the new $1.2 trillion Pacific Alliance (PA), a bloc with Colombia, Peru and Chile to increase their penetration of Asian markets.190 However none of these countries can provide Mexico with large-scale supplies of corn. This provides a strategic opportunity for the PA to build linkages with Brazil and Mercosur, where their comparative advantage is already helping Mexico to diversify its dependency on US corn.