More than three-quarters of England is now officially in drought. Across Europe, wildfires are burning, while low water levels on the Rhine are once again restricting one of the continent’s busiest inland trading routes. This is no longer an abstract debate about climate change – it is a commercial reality. When rivers run dry, trade slows down, costs rise and supply chains become more fragile.
For food and grocery businesses that disruption is not hypothetical. Low river levels have interrupted freight repeatedly over the past decade. What should concern policymakers and business leaders now is whether we are adapting quickly enough to a pattern that is becoming more frequent, more costly and harder to ignore.
It is telling that 2026 has been described as the year of water, with the issue dominating discussions at the World Economic Forum to such an extent that the gathering was dubbed “Blue Davos”. Water is no longer simply an environmental concern, it is becoming a test of economic resilience, industrial planning and international co-operation. Just last year the Panama Canal suffered disruptions due to low water levels.
With a government that will place greater emphasis on climate diplomacy, businesses must also consider the practical implications of climate risk for trade, supply chains and economic security.
Whether disruption comes from conflict in the Strait of Hormuz, US tariffs or low water levels in major rivers, the lesson is the same: businesses cannot build trading systems around assumptions of stability. Resilience must become a commercial competence, not merely a contingency plan.
The foreign policy lens
This matters for foreign policy as much as for environmental policy. The foreign secretary’s remit is not just diplomacy – it is also about safeguarding the UK’s interests overseas. Increasingly, that means understanding how climate impacts abroad affect the UK economy at home.
Drought in Germany can affect UK manufacturers. Wildfires in southern Europe can disrupt agricultural exports, including the fresh produce British retailers rely on for year-round supply. Low river levels can slow industrial production, while water shortages can constrain energy generation. Extreme weather can close transport corridors and ports. These are not peripheral environmental problems; they are direct threats to trade, costs and competitiveness.
The facts are already visible. England is in drought. Rhine water levels are affecting freight. Wildfires are disrupting parts of Europe. Businesses are adapting their sourcing, logistics and inventory strategies because they have to. The question is whether public policy is keeping pace with the scale of that adjustment.
We have been developing our thinking around the UK’s “peacetime footing”, supply webs and economic resilience. Climate-related disruption is another example of why resilience must be built into economic policy rather than treated as a response to isolated crises. Planning for geopolitical, cyber, infrastructure and environmental risks should be part of a single economic security strategy.
Climate change is often discussed as a long-term challenge. For trade, it is already a present-tense risk. The countries and companies that recognise this fastest will be better placed not only to withstand such shocks, but to shape the future of global commerce.
Marco Forgione is DG of The Chartered Institute of Export & International Trade
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