Physical climate assessment for a food and beverage company

Challenge

Our client is one of Australia’s largest food and beverage companies and a major player in the dairy industry. Understanding climate vulnerability is crucial for the business. Since completing an Australian Accounting Standards Board (AASB) roadmap and gap analysis, our client identified a need to understand the impact of physical climate risks and opportunities aligned to a 1.5°C a 3°C climate scenario. With such a vast and complex supply chain, the challenge was to identify where the company is exposed to physical climate risks and understand the magnitude of these hazards.

This climate scenario analysis not only supports with the requirements of AASB but also builds long-term resilience through understanding the potential impacts of extreme weather, water availability, and logistics disruptions.

Solution

Our team supported our client through the following:

• Physical climate risks – assessed the frequency and magnitude of climate hazards across three time horizons and two climate scenarios for all business units. The approach provided a critical score against sites, areas and transport routes from 1 (very low exposure) to 10 (very high exposure).
• Physical climate opportunities – assessed potential climate-related opportunities linked to different commodities and locations using the same time horizons and climate scenarios.
• AASB compliance – delivered a methodology and report that aligns with the reporting requirements.

Impact

The assessment delivered analysis that is grounded in credible science and stands up to the scrutiny of AASB audits. The results are user-friendly, versatile, and easily integrated into our client’s risk management framework, ultimately enhancing climate resilience to physical risks.

The structured approach to assessing physical climate risks and opportunities will ensure compliance with AASB standards while supporting informed decision-making for a more resilient future.