Food climate adaptation: overview
- Climate adaptation is increasingly vital as heat and drought intensify
- The EU requires €70bn annual adaptation investment through 2050
- Historically, less than 10% of climate finance supported adaptation
- Farmers lead adaptation spending as climate impacts threaten production
- Supply-chain resilience investments help protect availability, margins and prices
As the effects of climate change increasingly make themselves known around the world, the importance of adaptation is becoming ever clearer.
Investors are beginning to see the importance of not just mitigating the potential effects of climate change in the future, but strengthening their supply chains to adapt to conditions in the present.
Businesses have been affected by heatwaves in many different ways: lack of availability of water, the use of more energy in storage, and even transportation difficulties from hot rail lines, which expand and buckle in the heat.
According to a study by the European Commission, the EU must invest €70bn per year in climate adaptation up to 2050 to properly deal with these pressures.
Less than 10% of climate finance has historically supported adaptation, according to ING Bank. This can, says ING, be partially explained by economics. While sustainable practices such as renewable energy can generate revenue, adaptation measures do not lead to income: their returns are the losses they prevent.
How does this show up in the food sector? Is food ready to adapt?
Are investors getting behind sustainability?
Globally, sustainable finance in general is going nowhere, according to ING Bank, although there are some regional disparities.
It is strong in EMEA, with sustainable debt issuance in the first half of the year exceeding that in 2025. APAC is going steady, with similar but slightly lower levels compared to the previous year. In the US, sustainable finance issuance has fallen by around 40% compared to both 2024 and 2025, due to ‘policy uncertainty’.
Food and beverage generally follows the trend of sustainable finance overall, says Mayke Geradts, food and agri lead for the sustainability solutions group at ING Bank. Yet the sector faces its own challenges.
“Sustainability-linked financing remains particularly relevant because many material issues in the sector, including emissions, water, soil health and supply-chain resilience, sit across complex value chains rather than within one company’s direct operations,” she says.
When it comes to climate adaptation, this value chain must be taken into account.
The entire value chain must adapt
In food and agriculture, the entire value chain must adapt, says Geradts.
Farmers on the ground are keenly aware of the need for adaptation, and this is where many adaptation measures are concentrated.
“Farmers are usually the first to invest because they face climate impacts directly, for example through drought, flooding, heat or changing growing conditions,” says Geradts.
By contrast, retailers at the other end of the value chain usually invest less in physical adaptation at a farm level, although they can support it through supplier relationships, co-funding, technical assistance and sourcing practices.
Yet action is being taken on a supply-chain level. Retailers are diversifying the regions they source from and building security into supply chains. Specifically, they’re also putting money into future-proof refrigeration at distribution centres and stores.
“The broader point is that climate risks beginning on the farm do not remain there,” says Geradts.
“Production losses or volatility can affect availability, procurement costs, margins and ultimately consumer prices. Adaptation should therefore be viewed as a shared value-chain challenge, including the question of how costs, risks and investment are distributed among farmers, processors, traders, retailers, financiers and policymakers.”
While climate change puts increasing pressure on the bottom line, preparing for the future is no longer enough; the future is already here. Instead, food businesses across the supply chain must adapt to a volatile, unwieldy present.
