气候风险对主要商品的影响：企业领导者需知Climate risks to essential commodities What business leaders need to know

Climateriskstoessentialcommodities:

Whatbusinessleadersneedtoknow

SpecialreportforAsiaPacificEconomicCooperationeconomies

pWC

/climaterisks

2PwCClimateriskstoessentialcommodities

TableofContents

Executivesummary03

Keyfindings04

Chapter1:

Climateriskstocommodityproductionin08

APECeconomies

Chapter2:

Urgentactionsforbusiness19

Endnotes27

Acknowledgements28

3PwCClimateriskstoessentialcommodities

ExecutiveSummary

Companiesdependonsixessentialcommodities:lithium,cobalt,copper,iron,zinc,andaluminium.

It’snotjustmanufacturingorindustrialcompaniesthatrelyonthem.Thesecommoditiesarecriticalinputsfortechnology,energysystems,electronics,transport,construction,infrastructure,consumerproducts,

andmore.

Asweexplaininthisreport,productionofthesesixcommoditiesmaybeincreasinglydisruptedby

acceleratingclimatechange.1Evenmodestdeclinesincommodityproductioncancascadethroughsupplychains,affectingpricesandavailability.2Therefore,businessleadersshouldbeawareofclimate-driven

threatstosuppliesofessentialcommoditiesandtakestepstoprotecttheiroperations.

Buildingono

urearlierworktha

tidentifiedsevereclimateriskstoglobalproductionofmanyessential

commodities,thisreportdrillsdowntoclimateriskstocommodityproductioninselectedeconomies(US,

Canada,China,Australia,Peru,Chile,Mexico)thatarepartoftheAsiaPacificEconomicCooperationgroup(APEC)asaspecialreportfortheglobalAPECCEOSummitinNovember2024.

4PwCClimateriskstoessentialcommodities

APECeconomiesareleadingproducersofallsixcommodities.Inthecasesoflithium,copper,andzinc,theworld’stop3producersareallAPECeconomies.Asaresult,climate-drivendisruptiontocommodityproductioninAPECeconomiescouldhavesignificantimpactsonsupplychainsacrosstheworld.

Weexaminetwoimpactsofclimatechangeknowntobedetrimentaltoproductionofthesecommodities:heatstresswhichcanmakeittoohotforworkerstoworkoutside,anddroughtwhichcanbeproblematicbecauseminingandprocessingthesecommoditiesoftenrequiresalotofwater.

Thegoalofthisreportistoencouragebusinessleaders-bothproducersandconsumersofthese

commodities-tounderstandgrowingclimaterisksandsubsequentlytakestepstomanagetheserisks

andbuildresilientsupplychains.Thereport’sfinalchapter,‘UrgentactionsforBusiness,’offersarangeofpracticalstepsbusinessleaderscantakeillustratedbycasestudiesfromacrosstheworld.

Keyfindings:

TheworldreliesonAPECeconomiesforsixessentialcommodities.APECeconomiesincluding

Australia,China,Peru,ChileandCanadaareamongtheworld’stopthreeproducersofallsix

commoditiesinourstudy.Inthecasesoflithium,copperandzinc,theworld’stop3producersareallAPECeconomies.

CopperminesinChileandPeru,theworld’s#1and#2copperproducers,facesteeplyrising

droughtriskseveninanoptimisticscenarioinwhichtheworldsharplyreducescarbonemissions.

Inthisoptimisticscenario,41%ofPeru’scopperproductionwillbeexposedtosignificantdroughtriskby2050,upfrom0%today.Similarly,droughtrisktoChileancopperproductionmorethantriplesby2050.

LithiumminesinAustraliaandChina,theworld’s#1and#3lithiumproducers,facehugeincreasesindroughtrisksevenifcarbonemissionsrapidlydecline.68%ofAustralia’slithiumproductionand

70%ofChina’swillbeexposedtosignificantdroughtriskby2050,upfrom0%inbothcountriestoday.

Australiaistheworld’s#1producerofironandbauxite,and#2producerofzincandcobalt.

Australianproductionofallthesecommoditiesfacessteeprisesindrought,heatstress,orboth.

Forexample,by2050inahighemissionsscenario,46%ofAustralianbauxiteproductionfaceslevelsofheatandhumiditythataredangeroustooutdoorworkers(upfrom0%today).

Futureemissionsreductionswillnotprotectbusinessesfromachangingclimate.Eveninan

optimisticlowemissionsscenario,manycommoditieswillseerisinglevelsofriskfromheatstressanddrought,highlightingtheimportanceofadaptingtoachangingclimatewhilewestrivetoreducecarbonemissionstopreventclimatechangefrombecomingevenmoresevere.

Insomecases,risksarerisingsharplyfromlowlevels,underliningtheneedforbusinessleaders

topreparetomanageincreasingrisksthat,insomecases,theymayhavelittleexperienceinmanaging.

Whatthismeansforbusinessleaders:takethreestepstoprepareforthegrowingrisksof

disruption.First,enhanceresiliencebyidentifyingandmanagingclimaterisksthroughoutthesupplychain.Next,capitaliseontheopportunitiestodeliverproducts,services,orbusinessmodelsthat

helpcompaniesandcommunitiesbecomemoreresilientandadapttothechangingclimate.Finally,

joinforceswithstakeholdersfromgovernmentstocommunitiestoshapecollaborativeoutcomesandenhanceadaptationatapolicyandsystemiclevel.Weofferexamplesandcasestudiesinthe‘Urgentactionsforbusiness’chapter.

5PwCClimateriskstoessentialcommodities

Chapter1:

Climaterisksto

commodityproductioninAPECeconomies

TheworldreliesonAPECeconomies’productionofsixessentialcommodities

Sixcommoditiesareessentialtotheglobaleconomy:

Threecriticalminerals:cobalt,copper,andlithiumthatareintegraltoelectronics,technology,energysystems,andasuccessfultransitiontoalowcarboneconomy.

Threevitalmetals:iron,aluminium,andzincthatarewidelyusedinmanufacturing,transport,infrastructure,construction,consumerproducts,andmore.4

FromAustralia’slithiumminestoChile’scoppermines,APECeconomiesaresomeoftheworld’slargestproducersoftheseessentialcommodities.APECeconomiesincludingAustralia,China,Peru,ChileandCanadaareamongtheworld’stopthreeproducersofallsixcommoditiesinourstudy.

Inthecasesoflithium,copperandzinc,theworld’stop3producersareallAPECeconomies.

6PwCClimateriskstoessentialcommodities

APECeconomiesareleadingproducersofsixessentialcommodities

Shareofglobalproduction(2020)

10%20%30%40%50%60%70%80%90%100%

●

Vitalmetals

BauxiteIron

Zinc

Australia

Guinea

Brazil

Brazil

Australia

China

China

Australia

Peru

Australia

Chile

China

Lithium

Cobalt

Copper

DemocraticrepublicofCongo

Can

Aus

China

Chile

Peru

Criticalminerals

●

■Remainingtop10producingcountriesSource:CapIQ,FAO,PwCanalysis

WeanalyseclimateriskstoproductionofselectedcommoditiesinsevenAPECeconomies:Australia,US,China,Peru,Chile,CanadaandMexico

Hereishowwechosewhicheconomiesandcommoditiestoinclude.WeexamineanAPECeconomy’sproductionofagivencommodityif:

Thecountryproducesatleast1,000metrictonsofthecommodityeachyear.

Aminimumoffourdifferentmineowningcompaniesproducethecommodityinthecountry.Ourgoalisdiscussingrisksatanationallevel,notidentifyingrisksforindividualproducers.Sowedonotdiscussclimaterisksforcommoditiesthathavethreeorfewerproducersinagivencountry.Thatiswhythis

reportdoesnotincludeclimateriskstolithiumproductioninChileorcobaltproductioninCanada.Therearetoofewproducers.

Followingthesecriteria,weareabletoanalyseclimateriskstoselectedcommoditiesinsevenAPECeconomies.

7PwCClimateriskstoessentialcommodities

WelocatedminesinAPECeconomies,andthenidentifiedhowmucheachlocationwillbeincreasinglyaffectedbyheatstressanddrought

Tocarryouttheclimateriskanalysis,welocatedtheminesthatproducethesecommoditiesinAPEC

economies.Wenotedtheamountofthecommoditythateachmineproduces.Next,weanalysedthe

degreetowhicheachminewillincreasinglybesubjecttotwoclimateimpactsknowntobedetrimentaltoproduction:heatstressanddrought.Heatstresscanmakeitdifficultorevenlife-threateningforworkerstoworkoutside.Droughtcanharmminingwhichcanbeheavilydependentonwater(forexample,itcantakethousandsoflitresofwatertoproduceonekilogramoflithium).5

Weclassdroughtandheatstressrisksassignificant,highorextreme.

DroughtRiskLevels

RiskCategory

RiskLevels/DurationofSevereDrought

Significant

20%oftimeinseveredrought,overthe20yearspancentredoneachyearbeinganalysed

High

40%oftimeinseveredrought,overthe20yearspancentredoneachyearbeinganalysed

Extreme

80%oftimeinseveredrought,overthe20yearspancentredoneachyearbeinganalysed

Note:Thetermsignificantasweuseitherehasnorelationshiptostatisticalsignificancetesting.

Severedrought:Definedasvaluesbelow-1.5ontheStandardisedPrecipitation-EvapotranspirationIndex,amultiscalardroughtindex.

HeatstressRiskLevels

RiskCategory

RiskLevels/Duration

Impact

Significant

Atleast10daysperyearwithan

averagedailyWBGTof26.3°C.TotaldayswithWBGTatthislevelmaybehigher.

Reduceslabourproductivitybyatleast25%

High

Atleast10daysperyearwithan

averagedailyWBGTof28.9°C.TotaldayswithWBGTatthislevelmaybehigher.

Reduceslabourproductivitybyatleast50%

Extreme

Eachyear,anaveragedailyWBGTof32.2°Coccursononeormoredays.

Reduceslabourproductivitybyatleast75%andisdangeroustooutdoorworkers.

Sourceforlabourproductivityimpact:RockefellerFoundationResilienceCenter,‘Extremeheat:EconomicandsocialconsequencesfortheUS,’’2021WBGT=WetBulbGlobeTemperature,ameasureofheatandhumidity

OuranalysisrevealstheproportionofAPECcommodityproductionthatwillbeexposedtosignificant,highorextremelevelsofheatstressanddroughtriskatcurrentlocationsofproduction.6

8PwCClimateriskstoessentialcommodities

Werevealhowclimateriskschangeinbothlowandhighemissionsscenarios

Weidentifyclimaterisksatthepresentday(basedon2020),in2035,andin2050.Wedemonstratehow

climateriskswillvaryaccordingtohowmuchprogresstheworldmakesinreducingemissionsusingthesetwoscenariosdefinedbytheUN’sIntergovernmentalPanelonClimateChange:

Alow-emissionsscenarioinwhichsubstantiveactionistakentocurbemissions,keepingglobalaveragetemperatureincreasebelow2°C(ScenarioSSP1-2.6).

Ahigh-emissionsscenarioinwhichnoactionistakentofollowalow-emissionspathway,resultinginacatastrophicriseinglobalaveragetemperatureof4.4°Cby2100(ScenarioSSP5-8.5).

Weanalyselowandhighemissionsscenariosforthelatestyearinouranalysis,2050,becauseastime

passestheeffectsofdivergentpathsbecomemoreapparent.Formoreinformationonourmethodology,

pleaseseeour

earlierreport

onclimaterisktoglobalcommodityproduction.

Ouranalysisprovidesinsightforbusinessesseekingtoprotecttheiroperations(andpolicymakersseekingtoprotecttheireconomies)fromacceleratingclimatechange.

Assumptionsandlimitations

Weassumeproductionlevelsandlocationsremainthesame.Wedonotseektopredicthowthelocationsandvolumesofcommodityproductionwillchangeinthefuture.Therefore,weusetoday’slocationsandvolumesofcommodityproductioninouranalysis.Thisapproachallowsustoforecasthowtoday’sAPEC-basedcommodityproductionmaybeincreasinglyaffectedbyclimatechange.

Ouranalysisrevealsriskexposures,notactualdisruptionstosupply.Weestimatetheshareof

totalsupplythatcouldbeexposedtosignificant,high,orextremelevelsofheatstressordrought.Wedonotquantifythepotentialdisruption,suchashowmuchproductionvolumescouldfall.Commodityproducerscouldtakeactiontoprotecttheiroperationsfromclimatedisruption,andtheywouldbewisetodoso.

Belowwesummarisetheresultsofouranalysisandsomeofthelessonstheseofferforcommodityproducersandconsumers.

AustraliaandChinafaceincreasesinclimaterisktoallcommoditiesanalysed

Australia’sproductionofallsixcommoditiesfacesgrowingrisksofheatstress,drought,orboth.Inthecaseofdrought,risksarerisingfromverylowlevelswhichmaymeanthatminingcompaniesareless

accustomedtomanagingtheserisks.Today,noneofthesixcommoditiesproducedinAustraliafaceasignificantlevelofdroughtrisk(aswedefinesignificant),butby2050allsixcommoditieswillfacesomedegreeofsignificantdroughtrisk-evenunderanoptimisticlowemissionsscenario.

Perhapsthemostextremecaseisthatoflithium(Australiaistheworld’s#1lithiumproducer).Noneof

Australia’slithiumproductionfacessignificantdroughtrisktoday,butthisrisesto68%by2050eveninanoptimisticlowemissionsscenario(inotherwords,68%ofAustralia’slithiumwouldbeproducedatminesthatfacesignificantdroughtrisk).

Lithium

100

80

60

40

9PwCClimateriskstoessentialcommodities

Australia:Commodityproductionatrisk

20

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Cobalt

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Copper

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

10PwCClimateriskstoessentialcommodities

100

80

60

40

20

Zinc

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Iron

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Aluminium

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

Chartsshowthe%ofAustralia’stotalvolumeofproductionofagivencommoditythatisatrisk(notthe%ofAustralianminesatrisk).

Lithium

100

80

60

40

20

11PwCClimateriskstoessentialcommodities

China’scommodityproductionfacesparticularlysteepincreasesindroughtrisk.Allcommoditiesthat

weanalysedforChinafacerisingdroughtrisks-includingthecommoditiesforwhichChinaisoneof

theworld’stopthreeproducers:lithium,copper,andiron.Forexample,theproportionofChineselithiumproductionfacingsignificantorhigherdroughtriskrisesfrom0%todayto70%assoonas2035.

China:Commodityproductionatrisk

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Cobalt

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Copper

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

12PwCClimateriskstoessentialcommodities

100

80

60

40

Zinc

20

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Iron

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

13PwCClimateriskstoessentialcommodities

Peru,Canada,USandMexicofacenewandunprecedentedlevelsofdroughtrisk

Peruisamongtheworld’stopthreeproducersofcopperandzinc.Ouranalysisshowsnoincreasein

heatstressrisktoPeru’scopperandzincproduction(aswedefineheatstressrisk),butsizableincreasesindroughtrisk.41%ofPeru’scopperproductionand10%ofitszincproductioncouldbeexposedto

significantorhigherdroughtriskassoonas2035-upfrom0%ofeachcommoditytoday.

Peru:Commodityproductionatrisk

100

80

60

40

20

0

Copper

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Zinc

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

14PwCClimateriskstoessentialcommodities

Canada,similarly,facesnoincreaseinheatstressrisk(aswedefineheatstressrisk)butnotablerisesin

droughtrisk.34%ofCanada’scopperproductionand38%ofitszincproductionfacessignificantdroughtriskby2050inahighemissionsscenario-upfrom0%today.

Canada:Commodityproductionatrisk

100

80

60

40

20

0

Copper

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Zinc

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Iron

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

15PwCClimateriskstoessentialcommodities

Mexico,too,facesunprecedentedlevelsofdroughtriskwhichissettorisesharplyfromnear-zerotoday.By2050,inahighemissionsscenario,52%ofMexico’szinc,65%ofitsiron,and87%ofitscopper

productioncouldfacesignificantdroughtrisk,upfrom0%today.Inaddition,heatstressrisktoMexico’sironproductionmorethandoublesby2035.

Mexico:Commodityproductionatrisk

Copper

100

80

60

40

20

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Zinc

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Iron

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

16PwCClimateriskstoessentialcommodities

WhileUSzincseessmallrisesindroughtriskinthecomingyears,droughtrisktoUScopperrisesfrom

near-zerotodayto98%ofcopperproductionathighdroughtriskina2050highemissionsscenario.

SignificantdroughtrisktoUSironproductionrisesfrom0%ofproductionatrisktodayto83%atriskassoonas2035(though,aswewillseebelow,thisdroughtriskcoulddeclineafter2035inahighemissionsscenariobecauseasclimatechangegetsmoresevereitmaytendtocauseincreasedprecipitation).

SomereadersmaybesurprisedbythelowlevelsofheatstressriskshownforUScommodities.For

example,UScopperisminedinstateslikeArizona,Nevada,andNewMexicothatfrequentlyexperiencehightemperatures.Inthisreport,weuseaheatstressmetricthatcapturesthecombinedeffectsof

temperatureandhumidity(wetbulbglobetemperature).Asthesestatesarerelativelyarid,theirriskofheatstressaswedefineitislow.Thatdoesnotmean,however,thathightemperaturesarenotan

issueintheselocations.

US:Commodityproductionatrisk

Copper

100

80

60

40

20

2020

2035

2050L

2050H

2020

2035

2050L

2050H

0

DroughtHeatstress

Zinc

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

Iron

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

ThecaseofUSirondemonstratesthatclimaterisksmostlyincrease-butcansometimesdecrease

LookcloselyatourriskprojectionsforUSironandapuzzlingfactemerges.DroughtrisktoUSironis

actuallylowerina2050highemissionsscenariothanina2050lowemissionsone.ThereasonisthatmuchUSironisproducedintheGreatLakesregionwhichcouldseeincreasedprecipitationasclimatechange

worsens.7ThecaseofUSironisareminderthatclimatechangecandecreaseaswellasincreasetherisksofcertainhazards.8

17PwCClimateriskstoessentialcommodities

Chilefacesrisingdroughtrisks-andshowshowsomeproducersareadapting

Themessageofthisreportisthatcommodityproducersshouldpreparetoadapttoawarmingclimate.Chileoffersoneexampleofhowtodoso.

Chileistheworld’slargestproducerofcopper,miningover5milliontonsayear.Assoonas2035,72%ofChile’scopperproductionfaceshighdroughtrisk.InresponsetoworseningdroughtsinChile,someminingcompaniesareincreasingtheuseofdesalinatedseawaterintheiroperations.Todaytherearemorethan20desalinationplantsoperatinginChilewith10moreexpectedtocomeonlineby2025.9

Chile:Commodityproductionatrisk

Anoteonlithium:Chileisalsoamajorproduceroflithium.Wedonot

discussriskstoChileanlithiumproductioninthisreportbecauseChilehasveryfewlithiumminingcompanies.Ourgoalinthisreportisdiscussing

risksatanationallevel,notriskstoindividualcompanies.Therefore,we

confineourselvestodiscussingriskstocommoditiesproducedbyatleastfourdifferentcompaniesinagivencountry.

100

80

60

40

20

0

Copper

2020

2035

2050L

2050H

2020

2035

2050L

2050H

DroughtHeatstress

■Significantrisk■Highrisk■Extremerisk■Significantrisk■Highrisk■Extremerisk

Source:ProtectingPeopleandProsperity

18PwCClimateriskstoessentialcommodities

Conclusions

Ouranalysisleadsustothefollowingconclusions:

Futureemissionsreductionswillnotprotectbusinessesfromachangingclimate.Eveninan

optimisticlowemissionsscenario,commoditieswillseerisinglevelsofriskfromheatstressand

drought,highlightingtheimportanceofadaptingtoachangingclimatewhilewestrivetoreducecarbonemissions.

Insomecases,risksarerisingsharplyfromlowlevels,underliningtheneedforcommodity

producersandconsumerstopreparetomanageincreasingrisksthat,insomecases,theymayhavelittleexperienceinmanaging.

19PwCClimateriskstoessentialcommodities

Chapter2:

Urgentactionsforbusiness

Threestepstoadapttoachangingclimate

Businesses-bothcommodityproducersandconsumers-shouldactwithurgencytoprotecttheir

operationsandbuildresilientsupplychains.Howcancompaniestakeactiontoprotecttheiroperations,people,andsupplychainsfromtheeffectsofclimatechange?Below,weexplorethreestepsbusinessescantaketopreparetheirbusinessforwhatliesahead:1.Enhanceresiliencebyidentifyingandmanagingrisks,2.Capitaliseonopportunitiesand3.Shapecollaborativeoutcomes.

20PwCClimateriskstoessentialcommodities

Increaserevenue,cost

savingsandsustainability

Capitaliseonopportunities

Leverageproducts,services

andbusinessmodelsthathelpbusinesses,communitiesandecosystemsadapttoandbuildresilience

Pursueadaptationopportunitiesthatcontributetoefficiency,

sustainabiityandclimate

changemitigation

Establishaclimatestrategythatintegratesclimatechangeadaptationandnet-zerotransformation

Mainstreamclimateriskconsiderationsintobusinessdecision-making

Makecomprehensiveandtransparentclimatedisclosures

Workwithsuppliersand

communitiesconnectedtothe

valuechaintoenhancebusiness

resilience

Delivertransformativeprojectstobuildcommunityand

ecosystemresilience

Participateinmultistakeholdereffortsthatpromoteactiononclimatechangeadaptation

Assesstheimpactsofclimaterisksonbusinessandactto

adaptandbuildresilience

Protectcommunitiesandecosystems

Shape

collaborativeoutcomes

Enhanceresilience

Avoideconomiclosses

Enablingactions

Businesscase

Coreactions

Pillars

ThesethreestepscomefromaframeworkthatPwCdevelopedwiththeWorldEconomicForum(WEF)

toacceleratebusinessactiononclimatechangeadaptation.Belowweshareselectedcasestudiesof

companiesthathavesuccessfullyappliedthesesteps.Foramoreextensivesetofcasestudies,weinvitereaderstovisito

urearlierreporton

globalriskstocommodityproductioninalleconomies.

21PwCClimateriskstoessentialcommodities

Casestudy:Tesla’sstrategytoprotectitssupplyofcriticalminerals

Teslaisoneofthelargestmanufacturersofelectricvehiclesintheworldandreliesonregularsuppliesoflithiumandcobalttomakethebatteriesforitscars.Bothlithiumandcobaltplayanessentialfunctioninimprovingvehiclerangeandsafetyperformance.

Thecompanyhasthereforeadoptedamulti-prongedstrategytobuildverticalintegrationandhelp

itestablishareliablelithiumsupplychain.ItiscurrentlybuildingitsownlithiumrefineryinTexasand

hassignedagreementswithlithiumandnickelproducersintheUnitedStatesandCanadatogrowits

supplierbase.Itisalsocollaboratingwithotherbatterymakerstofacilitateconsistentsupply.Inadditiontoitsowncellmanufacturingoperations,thecompanycurrentlyusescellsfromfourdifferentsupplierswiththreedifferentbatterychemistries.

TeslaconductsanannualEnterpriseRiskAssessmenttoidentifyphysicalclimate-relatedriskstothebusinessincludingsite-specificreviewsofitsgigafactoriesandothermanufacturingsites.Usingtheresultsfromtheseanalyses,Teslaislookingatwaystoprotectitsmanufacturingactivitiesagainst

medium-termandlong-termclimateimpacts

.Learnmore

22PwCClimateriskstoessentialcommodities

Casestudy:MolsonCoorssupportslocalfarmerstogrowclimate-resilientbarley

USbrewerMolsonCoorshasdevelopedanindustry-leadingbarleyprogramthatproducesallthebarleyitneedsforitsUSproductionand20%ofthebarleyforitsCanadianoperations.

Theprogramwascreatedin1946andhasgro