Super El Niño: Why UK businesses should be planning ahead
- Eòsaph Macbeth
- Aug 10
- 10 min read
“You can't control the weather, but you can prepare for it.” It's a phrase that's often used when discussing life's uncertainties, but it has never felt more relevant for business.
Thousands of miles away in the tropical Pacific Ocean, sea surface temperatures are rising at an extraordinary rate. Meteorologists, economists, and climate scientists are now warning that 2026 could see one of the strongest El Niño events ever recorded.
The US National Oceanic and Atmospheric Administration (NOAA) says there is a significant chance that ocean temperatures will exceed the threshold required for what is commonly referred to as a Super El Niño, an event powerful enough to reshape weather patterns across much of the world.
At first glance, that might sound like somebody else's problem.
After all, the Pacific Ocean sits over 8,000 miles from the UK. It doesn't border Britain. It doesn't determine whether a café in Nottingham sells more coffee tomorrow morning or whether a manufacturer in Sheffield receives a shipment on time.
Or does it?
History suggests otherwise.
Read on to discover what this year’s Super El Niño could mean for you and your business.
What is a Super El Niño climate event? And how does it affect the UK?
El Niño is a naturally occurring climate pattern that forms every few years when sea surface temperatures in the central and eastern Pacific Ocean become warmer than average.
As these temperatures rise, they alter atmospheric circulation across the globe, changing where rainfall falls, where drought develops, and how storm systems behave.
Scientists refer to this broader cycle as the El Niño Southern Oscillation (ENSO).
During an El Niño phase, weakened trade winds allow warm water to spread eastwards across the Pacific. That extra warmth releases more energy into the atmosphere, influencing weather patterns far beyond the Pacific itself.
A Super El Niño occurs when these ocean temperatures rise more than 2°C above the long-term average. Events of this magnitude are exceptionally rare and have only occurred a handful of times since reliable records began.
Current forecasts suggest this year's event could become one of the strongest on record if warming continues as expected.
Previous major El Niño events have been linked to drought across Australia and parts of Africa, devastating floods in South America, failed harvests in Asia, and billions of pounds of economic losses worldwide.
This year's forecasts suggest an event that could prove even stronger, arriving at a time when global supply chains remain fragile, geopolitical tensions continue to push up energy costs and inflation has only recently begun to stabilise.
It's important to understand that climate change does not cause El Niño. It is a natural climate cycle that has existed for thousands of years.
However, scientists increasingly believe that a warmer atmosphere amplifies many of El Niño's impacts. Higher baseline temperatures mean droughts become more severe, rainfall events become more intense, and heatwaves last longer than they otherwise might have done.
As the UK Climate Change Committee recently warned, Britain is already experiencing greater risks from heat, flooding, and drought, regardless of individual weather events. El Niño simply adds another layer of uncertainty to an already changing climate.
For business owners, the scientific explanation matters less than the economic consequences. Because those consequences rarely stay local.
The butterfly effect of weather patterns for UK small business
One of the most fascinating aspects of El Niño is how a seemingly distant change in ocean temperatures can ripple through the global economy.
A prolonged drought in India reduces rice production.
Heavy rainfall damages soybean harvests in South America.
Coffee yields fall in Brazil.
Palm oil production slows in Southeast Asia.
River levels drop, making major shipping routes harder to navigate.
Suddenly, food manufacturers across Europe begin paying more for ingredients. Shipping costs rise. Insurance claims increase. Energy markets become more volatile.
Before long, those same pressures begin appearing on the balance sheets of businesses that have never heard of the Walker Circulation or Pacific trade winds.
The Guardian reports that analysts at Goldman Sachs believe a severe El Niño could increase global food commodity prices by almost 16%, with the effects taking years to fully work their way through global supply chains. Other analysts estimate that agricultural production could fall by more than 14% under an extreme scenario, representing hundreds of billions of pounds in lost global output.
These aren't isolated agricultural problems.
They become:
Manufacturing problems
Retail problems
Hospitality problems
Construction problems
Transport problems.
Ultimately, they become SME problems.
The Guardian goes onto report that economists are already warning that a Super El Niño could prolong pressure on global food prices well into 2028.
For many UK businesses, the greatest risk won't come from floodwater lapping at the office door or scorching temperatures damaging equipment.
It will arrive quietly.
A supplier suddenly increases prices.
Lead times stretch by another three weeks.
Raw materials become harder to source.
Customers begin tightening their spending.
Cash flow becomes just a little more difficult to manage.
Individually, these pressures may seem manageable. Together, they create exactly the sort of environment that tests even well-run businesses.
That's why the conversation surrounding this year's Super El Niño isn't really about weather.
It's about resilience.
Why Britain's small businesses won't escape the ripple effect
The UK imports around half of the food it consumes.
It also relies heavily on international supply chains for everything from electronics and timber to machinery, chemicals and manufactured components.
That means global disruption has a habit of becoming local disruption remarkably quickly.
For example:
A bakery in Derby may see flour, sugar and butter costs increase.
A café in Leicester could face higher coffee prices following poor harvests overseas.
A manufacturer in Lincoln may discover that essential components are taking longer to arrive because international logistics networks are under greater strain.
Even businesses with no obvious connection to agriculture may experience rising insurance premiums, higher transport costs, or renewed inflationary pressure if commodity prices continue climbing.
This isn't speculation.
It's exactly how interconnected economies function.
Small events rarely stay small.
Professor Edward Lorenz famously described the "butterfly effect" as the idea that tiny changes in one part of a system can eventually produce major consequences elsewhere.
Business works much the same way.
A delayed shipment in one country delays production in another.
A poor harvest raises supermarket prices.
Higher grocery bills reduce household disposable income.
Consumers become more cautious.
Retail spending slows.
Businesses feel the effects.
What begins as warmer ocean water eventually finds its way into company accounts.
The businesses that weather storms best aren't always the biggest; taking proactive steps could protect your business
One lesson appears repeatedly throughout history.
The businesses that survive periods of uncertainty are rarely those with the deepest pockets alone.
They're the ones that prepared before conditions deteriorated.
Countries invest in flood defences before rivers burst their banks. Electricity networks are reinforced before storms arrive. Reservoirs are expanded before drought takes hold. Preparation almost always costs less than recovery.
The same principle applies to business finance.
Yet many business owners understandably focus on immediate priorities. Sales targets, staffing, customer service, and day-to-day operations consume attention. Financial planning often becomes reactive, particularly during periods of economic uncertainty.
At First Enterprise, we regularly meet businesses that seek finance once pressure has already arrived.
Whether that means orders have slowed, suppliers have failed, or cash flow has tightened. There's nothing unusual about that. But the strongest businesses often approach finance differently.
They see it as part of their resilience strategy rather than simply a solution to an emergency.
That distinction matters.
Access to finance isn't just about funding growth. Sometimes it's about buying some degree of certainty.
It might allow a manufacturer to hold additional stock before supply chains tighten. It could enable a retailer to diversify suppliers before shortages develop. It may help a growing business invest in automation that reduces operating costs long before inflation creates additional pressure.
Just as importantly, it gives business owners choices.
And in uncertain times, choice becomes one of the most valuable assets any business can possess.
Resilience isn't built during a crisis; UK SMEs should plan ahead
It's tempting to think of resilience as something businesses discover when adversity strikes.
In reality, resilience is built long before it's tested.
A company that has strong management information, healthy cash reserves, diversified income streams, and access to finance doesn't suddenly become resilient when disruption arrives. It was resilient beforehand. The disruption simply reveals the strength of those foundations.
Climate scientists have spent years warning governments that preparation must happen before extreme weather arrives. Waiting until floodwater reaches your front door is too late to build flood defences.
The organisations that emerge strongest from periods of uncertainty are often those that recognised risk early and acted decisively.
That's one reason why financial planning deserves a broader role within every SME. It's easy to view finance purely as a means of expansion — opening a second premises, purchasing equipment, or recruiting staff. Yet, finance can be equally valuable as a form of strategic resilience.
Adapting your SME is a strength, not a compromise
Nature rarely rewards those that remain unchanged.
Ecosystems constantly adapt to changing conditions. Farmers alter planting schedules when rainfall patterns shift. Water companies invest in new infrastructure as demand changes. Governments strengthen flood protection in response to changing climate risks.
Businesses face the same reality.
Markets evolve. Customer expectations shift. Technology moves forward. Economic conditions rarely stay still.
The businesses that succeed over the long term are rarely those that stubbornly cling to a single way of operating. More often, they're the ones willing to evolve.
Diversification is one of the oldest forms of risk management
One of the recurring themes in ecology is that diversity creates resilience.
An ecosystem relying on a single food source is inherently more vulnerable than one supported by a wide variety of species. If one resource disappears, others remain.
Businesses face an equivalent challenge.
A company dependent on:
One major customer carries significant risk
A single overseas supplier may have little flexibility if disruption occurs
A sole product category has fewer options if demand changes unexpectedly.
The pandemic demonstrated just how exposed many organisations were to concentrated risk.
We’ve worked with businesses that had to rapidly adapt to survive the strain it put on their cash flow. Our case study on ProVis Events covers their journey from startup to pandemic survivor to growing business.
Since then, geopolitical tensions, shipping disruption, inflation, and energy price volatility have reinforced the importance of spreading that risk wherever possible.
Diversification doesn't necessarily mean reinventing your business.
Sometimes it's as simple as developing an additional revenue stream. Finding an alternative supplier. Expanding into neighbouring sectors. Broadening your customer base. Building stronger relationships across your supply chain.
Each step reduces dependence on any single point of failure.
Importantly, these changes often require investment before they begin generating returns. That's where access to finance can play an important role — not because something has gone wrong, but because a business has recognised an opportunity to become more resilient.
Rather than asking, "How do we survive this?", resilient businesses often ask a different question:
"How do we adapt to what's changing?"
Those two questions produce very different outcomes.
Climate risk is becoming business risk for UK SMEs
The UK's own experience over recent months demonstrates why climate resilience is becoming increasingly relevant for every organisation.
The BBC reports that the Environment Agency has declared drought across much of England following one of the driest summers on record. More than 20 million people have already been affected by hosepipe restrictions, while farmers have reported early harvests, lower yields, and increased financial pressure.
The National Farmers' Union has described climate change as making food production: "harder, riskier, and more costly".
Meanwhile, analysis from the Energy and Climate Intelligence Unit suggests Britain could experience one of its poorest cereal harvests since records began, creating further pressure on domestic food production and supply chains.
These developments aren't solely the result of El Niño. Nor should every weather event be attributed to climate change. But together they illustrate a wider trend.
Businesses are operating in a world where climate volatility is becoming more frequent, more complex, and more financially significant.
That means resilience planning can no longer be viewed as something reserved for multinational corporations.
It matters just as much for independent retailers, family manufacturers, professional service firms, local construction businesses, restaurants and bars, or technology startups.
Every organisation depends on stable supply chains, predictable costs, and confident customers.
When those foundations become less certain, preparation becomes increasingly valuable.
Why accessing finance should be part of your contingency plan
One of the biggest misconceptions surrounding business finance is that it's only needed when something has gone wrong.
In practice, the most successful funding conversations often happen before they're urgently required. Lending sought proactively with a clear strategy in mind could even be referred to as “good debt”.
Read more: Good debt vs bad debt
Businesses with healthy financial information, strong planning, and clear objectives generally have more options available to them. That flexibility can prove invaluable.
Funding might:
Support investment in more efficient equipment that reduces energy consumption
Provide working capital that enables larger stock purchases before supplier prices rise
Allow a business to recruit skilled staff, diversify into new markets, or accelerate a digital transformation project.
Equally, refinancing existing borrowing can improve cash flow and reduce financial pressure before external conditions become more challenging.
Viewed through this lens, finance becomes far more than capital. It becomes part of a business's resilience toolkit.
Discover the story of Getpotted.com and how they handled refinancing: Garden-focused e-commerce site funds growth with £350,000 Business Loan
Not every challenge can be predicted. But many businesses can improve how well they're prepared to respond.
Preparing your business for tomorrow, today
No one can predict exactly how this year's Super El Niño will unfold.
Forecasts evolve.
Weather systems change.
Some regions may experience less disruption than expected, while others could face greater challenges.
What remains consistent is the underlying lesson. Business has always involved managing uncertainty.
Whether the challenge is a global pandemic, geopolitical conflict, inflation, technological disruption, or changing weather patterns, successful organisations share one characteristic above almost everything else.
They prepare.
They invest proactively.
They review risks before they become crises.
They build flexibility before it's urgently needed.
The coming months may bring fresh pressures to global supply chains, food production, and operating costs. They may also create new opportunities for businesses ready to adapt.
While no business owner can influence temperatures in the Pacific Ocean, every business can decide how prepared it wants to be for whatever comes next.
Because you can't control the weather. But you can prepare for it.
Plan ahead with strategic funding; get in touch today
While no one can predict exactly what the future holds, businesses that plan ahead are often in the strongest position to adapt when challenges arise. Taking proactive steps today could help protect your business tomorrow.
If you're thinking about preparing your business for future climate challenges or investing in long-term growth and resilience, our team is here to help. We'll take the time to understand your plans, explore your funding needs, and help you find a finance solution that's right for your business.
Get in touch with our team today to start a conversation about how a Business Loan could help future-proof your business by completing the form below or by calling 0345 602 7355.
Remember: The climate may be unpredictable. Your business doesn't have to be.
Please note:
This article is for general information only and does not constitute advice. All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article.
We always recommend that you seek direct financial advice from a relevant expert or professional before making any financial decisions.
First Enterprise is a not-for-profit, FCA-regulated finance provider offering unsecured loans from £500 to £250,000 for start-ups and growing businesses across the UK.
We support businesses that struggle to access mainstream finance, with a focus on underrepresented groups. Funding is delivered through government-backed national and regional programmes.
We offer human-made lending decisions, a dedicated advisor for every applicant, and no penalties for early repayment.
