This report presents the first findings from the Autonomy Institute’s Risks to British Business (RtBB) tool. RtBB uses large language models to extract and categorise risk disclosures from the millions of annual reports filed by UK companies at Companies House each year.

Specifically, it looks at extreme weather risks in food production filed between 2022-2024 (years which saw record drought and flooding). Agriculture is the sector most saturated with climate risk disclosures and among the most candid in describing them, and so makes a compelling case study. Rather than offering a primary analysis of climate risk, we take filings as a form of testimony: a window into how British businesses (in particular medium-sized firms, which are very prominent in the Companies House dataset) are experiencing and responding to a changing climate.

Key findings:

• Extreme weather has become a defining business risk in the UK food system.

Agricultural firms report heatwaves, drought, prolonged rainfall, and flooding with striking frequency and granularity. The 2022 drought — the worst in 50 years for some crops — was followed by two consecutive years of abnormally wet conditions. Some businesses refer to this as “a new normal”, a chronic feature of global supply chains.

• Food production and quality have been significantly disrupted.

Successive extreme weather years have reduced yields, damaged crop quality, and disrupted harvests across fruit, vegetables, tubers, and grain.

• Climate disruption appears to be driving food price inflation.

Many companies are reporting that they have responded to supply shortfalls by passing costs onto consumers. More troublingly, a number of large firms in our sample have leveraged shortages to achieve record profits. Mercian Limited, the UK’s largest supplier of crisping potatoes, for instance, recorded its “strongest year to date” precisely because the worst drought in fifty years had generated “the highest potato prices we have experienced.” Olive oil brand Filippo Berio similarly grew its turnover during a period of declining consumption.

• Large, geographically diversified firms are well insulated from climate risk and can leverage this to profit from crises.

Companies operating across multiple climatic regions describe absorbing localised crop failures while profiting from the price rises those failures generate elsewhere. By contrast, smaller businesses with farms located in just one region struggle to cope with extreme weather related shocks. In some cases farms report reliance on unsustainable borrowing and face an uncertain future.

• Capital investment in the agricultural sector may be declining.

Machinery suppliers in our sample report a drop-off in customer confidence and investment following consecutive bad harvests. Growers who cannot meet their costs are deferring or forgoing equipment replacement. If this pattern is sustained it could impact the productive capacity of the UK food system.

• Disruption to global supply chains is compounding domestic pressures.

UK food businesses that import food are exposed to climate shocks in the global food systems. Extreme weather events in Spain, the Mediterranean, South America, and sub-Saharan Africa, El Niño-related disruption in South America, drought in southern Europe, and heat stress affecting African growing operations all appear directly in UK company filings.