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VIDEO: Supply chain sustainability risks

February 15, 2023

The Week in Sustainability – February 13–17, 2023

Tugboat pulling a container ship, meant to represent supply chain sustainability

Harvard Business Review study found that just 11% of suppliers in the U.S., China, and Taiwan are prepared for weather-related disruption. Yet 50% of U.S. suppliers and over 90% of Chinese and Taiwanese suppliers have already experienced climate volatility. 

What are these weather disruptions? They include everything from tornadoes, heat waves, wildfires, flooding, and hurricanes. In particular, the frequency of supply-chain-disrupting hurricanes in these areas is expected to quadruple in the next 15 years

The damage caused by climate change-related weather events leads to cost spikes in labor, energy, and logistics on top of costly manufacturing downtime.

And as a reminder, we’re talking about supply chain risks. So even if a company’s direct operations are insulated from catastrophic weather disruptions, they’re likely have suppliers who are not. 

As a business, what can you do to mitigate supply chain disruptions?  

This is where the Taskforce on Climate-related Financial Disclosures (TCFD) comes in. Guidance from this framework is designed to help companies assess their own climate-related risks. Companies can also use it to gauge the level of risk within its supply chain via supplier questionnaires.

When it comes to mitigation strategies, these will all be specific to each business and its unique risk profile. But, in general, buffering your inventory so you have reserves in the event of a disruption and maintaining close communication with suppliers are both key to mitigating supply chain disruptions.  

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  1. Harvard Business Review. “How Exposed Is Your Supply Chain to Climate Risks?” Accessed February 15, 2023
  2. Supply Chain Digital. “Climate change an ill wind for supply chain risk management” Accessed February 15, 2023

Editorial statement
At Sustain.Life, our goal is to provide the most up-to-date, objective, and research-based information to help readers make informed decisions. Written by practitioners and experts, articles are grounded in research and experience-based practices. All information has been fact-checked and reviewed by our team of sustainability professionals to ensure content is accurate and aligns with current industry standards. Articles contain trusted third-party sources that are either directly linked to the text or listed at the bottom to take readers directly to the source.
Alyssa Rade
Alyssa Rade is the chief sustainability officer at Sustain.Life. She has over ten years of corporate sustainability experience and guides Sustain.Life’s platform features.
The takeaway

New studies on physical climate risks have revealed that the vast majority of suppliers in areas likely to see increases in extreme weather are unprepared.