ProWein Report: Covid-19 will impact investment in sustainability

Covid-19 is likely to slow down the wine sector’s ability to adapt to climate change and make improvements in environmental sustainability, according to a large new study by ProWein.

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The ProWein Business Report 2020, which is based on a survey of almost 3,500 experts from 49 countries compiled by Geisenheim University at the end of 2020 looked at the effect on the Covid-19 pandemic across the wine trade, and the implications across the sector.

The report found that around 71% of producers and 76% of the trade said that they would reduce spending and cut costs as a result of the pandemic, with around 59% of producers and 48% of the trade saying they would delay investment and innovation.

This is expected to directly impact investment in green initiatives, it said, pointing out that although last year’s report on sustainability in the industry showed that the escalation of concern about climate change had led to a growing commitment to sustainability among the wine sector the majority of measures to protect the environment require investments by businesses.

“Covid-19 has already led to the postponement of investments and has attacked the economic substance of many businesses necessary for measures to increase sustainability,” it said. “Three out of ten experts therefore fear that producers will not be able to increase their environmental sustainability and adapt to climate change as quickly as necessary.”

The acute challenges posed by Covid-19 have made it the biggest threat to the industry, it found, with 78% of respondents naming it as the biggest threat. This pushed climate change into fourth place, behind the global economic downturn (68%), and health related policies such as tax hikes and minimum pricing for alcohol (55%) .

However climate change was still a major concern, voted as the biggest threat and challenge to the industry by nearly half of the respondents – 48%, compared to 50% last year.

Last year the ProWein Business Report 2019 made clear that escalating climate change has led to a growing commitment to sustainability in the wine sector. However, the majority of measures to protect the environment require investments by the businesses. Covid-19 has already led to the postponement of investments and has attacked the economic substance of many businesses necessary for measures to increase sustainability. Three out of ten experts therefore fear that producers will not be able to increase their environmental sustainability and adapt to climate change as quickly as necessary.

The 2019 report found that 73% of people polled expected some concrete effects of climate change on their companies with the effects of climate change being felt by 92% of small wineries, 89% of cooperatives and 75% of large wineries. These effects included reduced yields due to extreme weather, increased volatility of yields, water scarcity and drought and reduced window for harvesting.

It also pointed out that declining profitability hindered the ability for businesses to increase adaptability to climate change by investment.

You can read a summary here.