Seeing commodity shocks before they hit the supply chain

By Manonmani P, Sustainability Analyst, ClimatePartner UK

TL;DR:

• Cocoa prices nearly tripled in 2024; Arabica coffee hit record highs in early 2025
• Climate risk is already moving through commodity supply chains and into procurement budgets
• Companies that build supply chain sustainability on solid carbon accounting data will be better placed to anticipate these pressures

Commodity price shocks are no longer a future risk

Most businesses are not planning for a world where cocoa prices triple within a planning cycle, coffee costs spike mid‑contract, or weather shifts reshape procurement decisions in a single quarter.

Yet this is already happening.

In 2024, cocoa prices climbed to almost $12,000 per tonne after severe harvest failures in Côte d’Ivoire and Ghana, which together produce around 60% of global supply. Ageing trees, crop disease, and increasingly erratic rainfall all contributed to the shock.

Coffee markets have followed a similar trajectory. Drought conditions in Brazil and Vietnam have repeatedly disrupted supply, pushing Arabica prices to record highs in early 2025 and fuelling expectations of further increases as heatwaves and water stress intensify. In the UK, cocoa inflation peaked at around 27% in late 2023, and coffee inflation was still above 14% in 2025, compared with roughly 5% for food and drink overall.

These are not isolated anomalies. They are signals that environmental disruption is starting to reshape the reliability, cost, and predictability of global soft commodity supply chains.

Supply chain exposure extends far beyond agriculture

The UK food system relies heavily on imports from regions already under mounting pressure from drought and heat stress, including Spain, Greece, and southern Italy. In mid‑2025, around 40% of mainland Europe was in drought, with concerns raised about cereal and horticultural yields in key exporting regions. Drought in Vietnam can change the price of coffee served on British high streets, while poor cocoa harvests in West Africa feed straight through to manufacturers, retailers, and hospitality businesses worldwide.

The challenge is not a lack of warning signs. It is the gap between long‑term climate risk and short‑term business planning cycles.

Why business planning cycles are missing the signal

In my work with sustainability teams, a familiar pattern emerges. Scenarios that play out over five to ten years are often seen as “too far away” from the business cycle, even as the early stages of those scenarios are already visible in commodity markets. What looks like a distant climate trajectory from a corporate perspective can be very near‑term in terms of agricultural lifecycles, tree age, or water availability.

This is where the role of data needs to shift.

Supply chain data as an early warning system

Many businesses already hold more of the necessary information than they use. Supply chain mapping, supplier‑level emissions data, and basic sourcing visibility can function as an early‑warning system, revealing where a company is heavily exposed to a single region, crop, or tier of suppliers long before that exposure shows up in financial results.

How carbon accounting strengthens supply chain resilience

For companies exposed to agricultural commodities, emissions data is no longer just a reporting requirement. It is becoming a form of strategic intelligence. Supply chain emissions often account for the majority of a company’s footprint, frequently well above 70% of total emissions. Understanding where commodities are grown, how dependent you are on specific producing regions, and which suppliers sit behind your highest‑emitting materials is the same work that allows you to stress‑test procurement strategy, diversify suppliers, and plan for disruptions rather than simply absorbing them.

In other words, the same datasets that underpin climate disclosures can help answer very commercial questions: Where are we over‑exposed? Which suppliers are most vulnerable to drought or heat stress? How quickly would a regional crop failure translate into contract renegotiations, margin pressure, or even product reformulation?

ClimatePartner helps build that data foundation

At ClimatePartner, we see this shift when clients start to use product‑ and supply‑chain‑level carbon data to map hotspots and engage key suppliers, rather than treating it purely as a compliance exercise. Our role is to help build that data foundation, so sustainability teams have evidence they can bring into strategic conversations about sourcing, resilience, and long‑term planning.

Supply chain resilience as a competitive advantage

The companies best positioned for the next decade of commodity disruption will not just be the ones that move fastest when prices spike. They will be the ones that invested early in understanding their supply chains deeply enough to see those shocks coming.

Soft commodities are already signalling where pressure is building. The question is whether businesses continue to treat those signals as little more than reporting obligations, or start using them to see shocks coming before they hit the supply chain, and to act accordingly.

FAQs:

What is climate risk in the supply chain?

Climate risk in the supply chain refers to the financial and operational exposure companies face when environmental disruption (drought, heat stress, harvest failure) destabilises the sourcing, cost, or availability of key inputs. As of 2025, these pressures are already visible in commodity markets, with cocoa and coffee prices experiencing significant volatility driven by climate disruption in West Africa, Brazil, and Vietnam.

How does carbon accounting help manage supply chain climate risk?

Scope 3 carbon data maps where a company's emissions originate across its supply chain. That same data reveals geographic concentration risk, supplier vulnerability, and material-level exposure to climate-stressed regions, giving procurement teams a clearer picture of where cost pressure is most likely to build.

What share of corporate emissions comes from the supply chain?

For most companies, scope 3 supply chain emissions account for between 70% and over 90% of total corporate emissions.

Which regulations are driving supply chain emissions transparency in 2026?

The EU's CSRD (Corporate Sustainability Reporting Directive), CBAM (Carbon Border Adjustment Mechanism), CSDDD (Corporate Sustainability Due Diligence Directive), and Digital Product Passport requirements are all converging in 2026–2027 to make supplier-level emissions data a mandatory business requirement across European value chains.