Climate change is already having a profound impact on the extraction and availability of raw materials, and these effects are only expected to worsen. From agriculture to mining, rising global temperatures and extreme weather events are disrupting production processes, threatening supply chains, and increasing costs.
The production of both mineral and biological raw materials is being disrupted by the effects of climate change. Heatwaves, droughts, and extreme weather events such as hurricanes and wildfires are reducing yields, limiting production, and damaging critical infrastructure.
For example, the floods that struck Valencia, Spain, in November 2024 devastated agricultural crops, leading to a nationwide increase of 10% to 20% in the price of certain fruits. This demonstrates how localised climate events can have far-reaching economic impacts.
Similarly, water scarcity poses a severe challenge, particularly for the mining sector. Water is essential for the extraction, processing, and management of mining operations, making this industry highly vulnerable in regions already experiencing water stress. In Brazil alone, mining accounts for 1.6% of the nation’s total water use, equivalent to 30 million people‘s water supply. Globally, 30% to 50% of copper, gold, iron ore, and zinc production takes place in areas of high water stress, with financial losses in the sector exceeding $20 billion in 2018 alone due to water-related disruptions.
Industries such as agri-food, textiles, telecommunications, metal production, and construction are among the most exposed. Since raw materials are the first link in any value chain, fluctuations in their availability can trigger cascading effects across all stakeholders—right down to the end consumer.
Decreased availability often leads to price increases, which suppliers may pass on to buyers. In extreme cases, climate-related disruptions can make it impossible to source a critical raw material, halting production for any company that lacks sufficient contingency measures.
Adapting to these risks begins with understanding them. Businesses need to assess how climate change is likely to affect their most critical raw materials and take action to mitigate these impacts. This requires a strategic, data-driven approach tailored to the material and its specific context.
For example, in agriculture, rising temperatures and water stress can be mitigated by using heat-resistant crop varieties, diversifying production locations, or adopting sustainable practices such as agroforestry. Organisations like the UN’s Climate-Smart Agriculture program promote these adaptive strategies to enhance resilience.
By contrast, a more integrated approach is needed for water stress affecting mining operations. Preserving natural habitats and forested areas plays a key role in enhancing regional water resilience by supporting natural water cycles and soil conservation. This can be complemented by a comprehensive water management strategy, including consumption reduction, water reuse, and recycling within mining processes.
More broadly, businesses can improve resilience by diversifying their supplier base, enabling flexibility when facing price spikes or disruptions.
At SE Advisory Services, we’ve developed a comprehensive approach to help businesses quantify and mitigate resource-related risks. Our expertise is grounded in scientific best practices, robust data, and industry expertise, structured in four key steps:
With a bespoke approach we adapt to your organisation, delving deeper into certain areas, breaking down results by business unit or organizational structure. We also support our clients on their journey toward greater analytical autonomy, should they wish to build internal capabilities.
One of our clients in the agri-food sector sought to assess the climate-related risks affecting the availability of key agricultural products used in their manufacturing processes. Olives emerged as a critical raw material during the dependency analysis, prompting a deeper investigation into this ingredient.
SE Advisory Services’s analysis revealed that while olives can be cultivated in various regions globally, 98% of the world’s production comes from countries surrounding the Mediterranean Sea. In this region, climate conditions in the main producing countries are expected to become less favorable for olive cultivation. Our projections indicate an average 35% decrease in olive availability by the second half of the 21st century, weighted by the client’s sourcing regions. Additionally, our results show that a severe shortage is likely to occur approximately one year out of five.
The primary driver of reduced olive productivity is drought, although high temperatures—currently a rare issue—are expected to become more frequent and problematic. The client then explored alternative sourcing regions, and our analysis identified the northern Mediterranean basin as less exposed to climate risks. A region stretching from Hungary to Bulgaria is projected to become highly suitable for olive cultivation in the future.
In another study, a client from the luxury and textile sector examined the impact of climate change on the continuity of supply for a specific critical mineral, gold. This material had been previously identified as a strategic resource within their value chains. The analysis focused on a set of mines representing approximately 4% of global gold production, with the goal of quantifying potential production losses due to climate-related disruptions such as floods, cyclones, wildfires, water stress, and heatwaves.
Each type of climate event was associated with an estimated downtime, based on scientific literature and historical data from the mining sector. Using our ECLR climate risk analysis platform, we modelled the exposure of selected sites to these hazards, including specific climate impacts such as the number of days per year with extreme precipitation. The analysis also considered the declining concentration of gold in extracted ore—a compounding factor under water stress conditions.
We conducted a detailed vulnerability assessment for each mine, integrating data on production, reserves, revenue, carbon intensity, operational methods, and existing risk evaluations. The findings revealed that temporary site closures due to extreme precipitation and productivity losses from heatwaves are the most significant risks for the analyzed mines.
Overall, our models suggest that around 15% of production from the selected mines could be compromised by 2030 under the RCP 8.5 scenario due to extreme climate events. Additional analyses were carried out to estimate the potential financial impacts on gold prices. These insights provide a crucial foundation for engaging suppliers in building resilience against escalating climate risks.
As climate risks intensify, the availability and cost of raw materials will become increasingly volatile—impacting not just producers, but entire value chains. Businesses that proactively assess their exposure and implement targeted adaptation strategies will be better positioned to navigate uncertainty and protect long-term value.
SE Advisory Services’s approach empowers organizations to move from reactive risk management to proactive resilience planning. Whether you’re in agri-food, mining, textiles, or beyond, understanding your raw material dependencies and climate vulnerabilities is the first step toward securing your supply chain.
Ready to assess your climate risks? Get in touch to explore how our tailored analysis and strategic support can help future-proof your operations.
Choose SE Advisory Services for industry-leading expertise in climate strategy and sustainability solutions. We’re here to guide your business through every step towards achieving your sustainability goals while supporting your operational success and market reputation.