UK food system faces £2.6bn climate inaction shock

Key findings from IGD and EY’s climate risk assessment:

• £2.6bn in extra food costs expected if current practices continue, driven by climate volatility and inflation. This reveals the true cost of net zero inaction.

• Ten essential food commodities at risk under multiple climate scenarios.

• Immediate action urged from business and government, to protect UK food security to 2050.

• Clear, practical insights provided to guide investment, policy, and supply chain resilience, with clear conclusions that support the business case for accelerated progress towards net zero.

A ground-breaking climate risk model launched by IGD reveals that the UK food system is exposed to £2.6bn in additional food costs if current practices continue, driven by inflation and volatility.

The model, developed with consultants EY has been developed to support business leaders and policymakers. The assessment addresses the mounting challenges climate change presents to the UK food system. Its purpose is to inform decisions on investment, foster collaboration, and shape policy efforts to secure the nation’s food supply through to 2050.

The analysis delves into three varying climate scenarios – net zero, delayed progress to net zero and Business as Usual. It evaluates how these pathways may influence the productivity and costs of ten essential commodities1 underpinning the country’s food security.

Offering clear, practical insights for everyone involved in the food supply chain, the assessment marks an initial step towards building an open-access tool that empowers organisations to identify their exposure and respond effectively to climate-related risks.

The climate risk assessment identified five key findings:

1. £2.6bn financial impact from Business as Usual. Maintaining Business as Usual exposes the UK to significant inflation, with additional costs of £2.6bn, equivalent to over 5.9% of annual food commodity costs. This further informs the business case for progressing to net zero, at pace.

2. Imported horticulture is greatest risk. The UK is heavily dependent on imports of fruit and vegetables and these commodities are most vulnerable to climate change. Citrus, banana, and tomato face the greatest risk.

3. Dietary shift with current sourcing could bring risk. Transitioning to healthy and sustainable diets can offset some risks, but increased fruit and vegetable consumption from current supply sources adds risk to an already vulnerable category.

4. Supply from new provenances needed. The largest import-related cost risk comes from Spain, a key sourcing region. Future sourcing and investment strategies must be developed to mitigate risk and over-reliance on exposed regions. This validates the growth opportunity for UK horticulture.

5. Domestic capacity must be maintained. Progress to net zero would make UK production more competitive as it benefits from improved growing conditions for wheat. UK productive capacity must be maintained to realise these benefits.

Sarah Bradbury, Chief Executive at IGD, comments: “The decisions made today across businesses, government, and consumers, will shape the UK food system’s resilience and success for the future. Building resilience is not only vital for the environment but also a commercial necessity. With growing volatility and scarce resources, ensuring a reliable food supply will provide a key competitive edge.

“By collaborating, adapting, and managing risks, the UK can secure a sustainable and robust food future for all. Our climate risk assessment with EY offers clear guidance for businesses to stress-test strategies, concentrate efforts where they matter most, and work with us to achieve a resilient food system.”

Climate change is already reshaping the UK food system, with record-breaking heat, persistent flooding and water stress disrupting yields and driving up costs. The challenges facing the sector are unprecedented and they will intensify in the years ahead. The UK was the first nation to set out a Net Zero Transition Plan for its food system, but this new climate risk assessment shows that immediate action is essential.

To read more about IGD’s new climate risk assessment, read the full report here: (add link).

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Notes to editors:

1. All content is owned by IGD. If you use or refer to any content in this press release, please credit IGD.

2. Follow us on LinkedIn: https://www.linkedin.com/company/igd/

3. IGD brings together stakeholders from across the food system, fostering action across on critical challenges across a broad cross section of forums. Through evidence-based insights, credible research, and thought leadership, IGD guides businesses to make informed decisions that not only benefit their operations but also contribute to the collective good of society. As a charity with a long-standing commitment to the food and grocery industry, IGD does not advocate for any single commercial interest but works towards fostering alignment on shared goals that can have a positive, lasting impact on both the industry and the communities it serves. Its neutrality and impartiality are key to its role in facilitating collaboration, whether through policy development or addressing emerging risks and opportunities. By staying connected to the changing dynamics of the world, IGD ensures that the food system remains robust and sustainable, creating tangible benefits for businesses, consumers and society.