Highlights

The Client: A large multinational producer and distributor of premium beverages and spirits

Users: Sustainability, Procurement, Risk/Strategy Teams

The client, a global beverage company headquartered in Europe, relies on a diverse supplier base for critical agricultural inputs such as sugar beets and processed ingredients. As regulatory expectations for sustainability reporting have accelerated, particularly under the EU’s Corporate Sustainability Reporting Directive (CSRD), the client sought to strengthen their ability to identify, quantify and explain climate-related risks across their supply chain.

With climate hazards increasing in frequency and intensity, the client’s sustainability team wanted to move from high-level qualitative narratives to a quantitative, scenario-based assessment. They needed a way to anticipate climate-driven disruptions that could affect the availability, quality and pricing of key inputs, and to translate those impacts into insights that internal stakeholders can act upon.

To do this, they engaged S&P Global to deliver a structured climate risk analysis focused on:

  • Supplier physical risk (climate impacts on crop yields/quality and supply and price effects)
  • Supplier carbon pricing risk (transition risk impacts on supplier earnings)

Pain Points

Prior to the engagement, the client’s team faced several common barriers to progress.

  • Inconsistent information
    • External studies on climate impact vary widely by crop, region, timeframe and scenario assumptions, making it difficult to conduct an apples-to-apples comparison across inputs
  • Limited forward-looking supply chain insight
  • Lack of a consistent method for identifying
    • The highest-risk supply regions
    • When risks are most likely to intensify
    • How physical impacts could translate into supply volatility and price movements
  • Difficulty translating climate risk into financial terms
    • Supplier costs and margins (commodity prices)
    • Long-term procurement exposure
    • Financial performance

The Solution

S&P Global delivered a two-phase engagement combining climate scenario analysis with supply chain and financial translation.

Phase 1: Supplier Physical Risk (Agricultural supply + price impacts)

The project assessed how climate change could influence crop yields and quality under multiple climate scenarios, and how those impacts could translate into production outcomes and price volatility over the medium term.

Key elements included:

  • Scenario-aligned climate framing (e.g., moderate vs high warming pathways)
  • Mapping climate impacts to priority production regions
  • Implications for availability, quality and commodity price dynamics
  • Translating findings into supply chain resilience insights relevant for procurement strategy

 

Phase 2: Supplier Carbon Pricing Risk (Transition risk + financial effects)

In parallel, the project used S&P Global Sustainable1’s Transition Risk Analytics to assess the potential impact of future carbon pricing on the earnings profile (EBIT/EBITDA) of priority suppliers, and to identify where carbon pricing could create elevated transition risk exposure across the supply chain.

Key elements included:

  • Estimating carbon pricing impacts on supplier profitability
  • Identifying supply chains with the greatest exposure (e.g., glass bottles)
  • Connecting supplier-level impacts to implications for the client (e.g., cost pass-through risk, supplier stability and longer-term sourcing strategy)
  • Providing outputs that could support risk management and CSRD-related disclosures

 

Key Benefits

The engagement enabled the client’s sustainability team to move from broad climate narratives to a more structured, qualitative, scenario-based assessment.

  • Better clarity on “what and when”
    • What commodities and supplier regions are most exposed
    • What hazards and pathways are most relevant
    • When will risks become more material over the medium term
  • Improved internal decision support”
    • Stronger input into procurement planning and supplier engagement
    • More consistent prioritisation of mitigation actions
    • A clearer basis for cross-functional discussions with Finance and Strategy
  • Stronger reporting readiness”
    • Scenario-based analysis suitable for CSRD-aligned disclosure narratives
    • Evidence and assumptions presented in a more structured way
    • Outputs that support governance and internal review processes

Uncover opportunities and build resilience in the transition to a sustainable future. S&P Global’s sustainability intelligence, climate risk expertise and decision-driving analytics empower corporations to move from risk identification to practical mitigation planning.

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