Can Your Supply Chain Handle the Heat? Building Climate Resilient Supply Chains
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Climate Change

Can Your Supply Chain Handle the Heat? Building Climate Resilient Supply Chains

27 June 2024 / Report

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Extreme weather events are occurring more frequently worldwide, posing an increased threat to human health and safety, the environment, and the global economy. Companies should recognize extreme weather as an immediate challenge and act to improve their supply chain resilience.

Trusted Insights for What’s Ahead™ 

  • Supply chain risks increase as the frequency and intensity of weather-related incidents exceed anticipated levels. The World Economic Forum identifies extreme weather as the top risk most likely to present a significant global crisis in 2024.  To mitigate potential financial losses and enhance resilience, businesses need to integrate climate risk assessments into their strategic planning and crisis management profiles.

Extreme weather events are occurring more frequently worldwide, posing an increased threat to human health and safety, the environment, and the global economy. Companies should recognize extreme weather as an immediate challenge and act to improve their supply chain resilience.

Trusted Insights for What’s Ahead™ 

  • Supply chain risks increase as the frequency and intensity of weather-related incidents exceed anticipated levels. The World Economic Forum identifies extreme weather as the top risk most likely to present a significant global crisis in 2024.  To mitigate potential financial losses and enhance resilience, businesses need to integrate climate risk assessments into their strategic planning and crisis management profiles.
  • Lowering the risk of supply chain disruptions requires risk mitigating and adaptative strategies, which include mapping climate and weather risks, diversifying sources and routes, and leveraging digital technologies. Companies can enhance their supply chain resilience by understanding the climate risks at different locations, using multiple suppliers and transportation routes from different regions, maintaining inventory buffers and capacity cushions, and investing in new technologies such as AI-driven analytics to monitor and mitigate potential disruptions.
  • Digital technologies can facilitate quick and effective responses to climate-related disruptions. Investing in AI-driven analytics to predict and mitigate potential climate risks will further strengthen supply chain resilience. The Supply Chain Tool Database of the Conference Board lists more than a dozen digital tools that can alert supply chain managers to potential disruption

Authors

Yulia Tseytlin

Yulia Tseytlin Yulia Tseytlin

Research Fellow, Governance & Sustainability Cente…
The Conference Board

Read Bio

Ioannis Siskos

Ioannis Siskos Ioannis Siskos

Senior Research Fellow, Governance & Sustainabilit…
The Conference Board

Read Bio

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