How can you evaluate your supply chain's vulnerability to climate change?

The climate has always changed and will always change. Machines, technology , good planning , design , placement of infrastructure allow civilizations to cope with natural climate events. The big risk to industry, is government promotion of climate crises and their actions limiting beneficial industrial activity , based on a misguided understanding of the climate system or self serving agenda to gain power through climate fear and propaganda.

Identify climate risks in your supply chain: 1. Physical Risks: Evaluate direct impacts like floods, droughts, and storms. 2. Transition Risks: Assess indirect impacts such as regulations and stakeholder pressures. 3. Data Sources: Use climate models, projections, and tools like IPCC reports or WRI's Aqueduct for insights. This assessment lays the groundwork for proactive climate resilience strategies in your supply chain.

Evaluating your supply chain's vulnerability to climate change requires a strategic, multi-faceted approach. 1) Assess the geographical and environmental risks specific to your supply chain's locations - the potential impact of extreme weather events or gradual climate changes on these areas. 2) Analyse the resilience of your supply chain infrastructure and logistics - the robustness of transportation networks, storage facilities, supplier capabilities against climate-related disruptions. 3) Consider regulatory risks, eg changes in environmental laws and policies that could affect supply chain operations. 4) Integrate climate risk management into your overall business strategy for adaptability in the face of changing climate conditions.

If your supply chain has certain degree of maturity related to climate change, you can push forward your supply chain partners to take TCFD analysis. It can help them map climate related risk and map opportunities related to it. It will also assist them building capacity for future threats.

Evaluate climate sensitivity in your supply chain: 1. Performance Factors: Assess complexity, diversity, flexibility, efficiency, quality, reliability, and resilience. 2. Interdependencies: Consider interactions with partners—suppliers, customers, distributors. 3. Assessment Tools: Use surveys, workshops, or frameworks like SCCRF, SCVI, or SCOR for insights. This evaluation guides strategies to enhance supply chain resilience in the face of climate-related challenges.

Assessing climate sensitivity in supply chains is a critical aspect of strategic leadership requiring a strategic, forward-thinking approach that integrates sustainability as a core business strategy, not just a supply chain characteristic. Businesses can transform supply chain vulnerabilities into competitive advantages with proactive innovation to develop more sustainable, efficient, and resilient supply chains. - Integrate climate resilience into the business model and decision-making process - Develop new products/services that leverage climate resilience as a unique selling point - Use advanced analytics and AI to predict and mitigate climate-related disruptions - Continuously assess and update strategies based on data and trends

Evaluate the adaptive capacity of your supply chain to climate hazards: 1. Resource and Capability Assessment: Consider financial, human, technological, organizational, and social capital. 2. Drivers and Barriers Analysis: Examine factors like vision, strategy, culture, governance, innovation, and collaboration. 3. Assessment Methods: Utilize tools such as SWOT analysis, gap analysis, maturity models, or roadmaps. Examples include the Climate Adaptation Maturity Model (CAMM), Supply Chain Adaptation Capability Framework (SCACF), or Adaptation Action Plan (AAP). This evaluation informs strategies to enhance the supply chain's ability to cope with and adapt to climate change in both short and long terms.

Supply chain climate adaptation requires a holistic, forward-thinking approach for long-term resilience and competitiveness. 1) Integrate climate adaptation actions into core business strategy, fundamentally rethink how supply chains operate 2) Use innovation and technology to mitigate climate risks and create new opportunities - green technologies and novel materials/processes 3) Broad spectrum stakeholder engagement to develop robust and inclusive adaptation strategies 4) Go beyond immediate costs and benefits to look at the broader impact on reputation, market positioning, alignment to sustainability goals 5) Nurture a sustainable and resilient corporate culture, with leadership that champions these principles at every level