Rising Climate Risks, Rising Grocery Bills

Today’s ESG Updates

• Climate Change Drives Global Food Price Surge: Since 2022, flash floods, droughts, and heatwaves have led to dramatic spikes in food prices worldwide.
• UK Water Sector Faces Major Revisions: Due to public outrage over sewage dumping, the UK government is proposing a new regulator for the private water sector.
• China Expands EV Dominance to South America: Chinese automakers are establishing plants in Brazil to boost their global EV market share.
• Seabed Mining Firm Sparks Legal Concerns: The Metals Company is moving forward with its deep-sea mining plans despite lacking international permits.

Food prices rise as a result of climate change

Since 2022, food prices have experienced a surge in response to climate disasters. After flash flooding in Australia in 2022, lettuce prices saw a 300% increase. A drought in Brazil in 2023 led to a 55% increase in coffee prices, while a heatwave across the Ivory Coast and Ghana resulted in a 280% global price surge for cocoa in 2024. Researchers from the European Central Bank and other research institutions released these findings on Monday, prior to the United Nations Food Systems Summit, which is being held from July 27 to July 29 in Ethiopia. Maximillian Kotz, head author of the report from the Barcelona Supercomputing Center, said, “People are noticing, with rising food prices number two on the list of climate impacts they see in their lives, second only to extreme heat itself.” Companies can mitigate the escalating impacts of climate change by utilizing ESG solutions to track their net-zero targets. 

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Further reading: Climate crisis causing food price spikes around the world, scientists say

Private water sector faces major overhaul in the UK

Thames Water, the UK’s largest water supplier, is facing 1.4 billion pounds (about $1.89 billion) in pollution fines. The public is outraged by the high levels of sewage being dumped into rivers and lakes across England and Wales. As a result, the government is seeking to transform the private water sector by eliminating the financial watchdog, Ofwat, and developing a new regulator. Thames Water is under threat of becoming nationalized due to its financial crisis. The company cited high pollution fines, which account for a small percentage of its current 17 billion pounds ($23 billion) debt, as the reason for its potential collapse. 

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Further reading: UK to create new water regulator amid crisis at Thames Water

China looks to South America to expand EV reach

China is rapidly becoming a leader in electric vehicle (EV) manufacturing and exports, offering top-of-the-line technology at an affordable price. With plants operating or under construction from Thailand to Hungary, Chinese companies control the electric vehicle supply chain and hold a 20% share of the European EV market. Now, automakers such as Great Wall Motor and BYD are looking to Brazil to build manufacturing facilities and further expand their sales. An old Mercedes plant near São Paulo is now home to Great Wall Motor, while BYD operates out of an old Ford facility. While electric and hybrid cars currently account for 6% of the market share, BloombergNEF estimates that they will dominate the Brazilian market come 2037. 

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Further reading: Chinese Car Giants Rush Into Brazil With Dreams of Dominating a Continent

Deep-sea mining firm seeks to mine seafloor despite legal setbacks

The Metals Company (TMC), a Canada-based deep-sea mining firm, is under scrutiny as the company seeks to mine seabeds without obtaining a permit from the International Seabed Authority (ISA). After the Trump administration’s executive order to expand deep-sea mining in April, TMC submitted an application to mine the mineral-rich seabed in international waters. At recent ISA talks in Kingston, Jamaica, Matthew Gianni, a co-founder of the Deep Sea Conservation Coalition, said, “TMC has been testing the limits of what it can get away with, a bit like a child seeing how far it can go with bad behavior.” Despite legal uncertainties, the company is investing in the technology needed to mine the seafloor at scale. Companies can look to ESG solutions to ensure compliance with global sustainability standards. 

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Further reading: Seabed-Mining Firm Faces Legal Questions Over Controversial Trump Policy

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Shelley Pauls