How Climate Change is Messing with Your Supply Chain
Climate change might be the greatest threat to business yet, here’s what to do about it.
A company’s resilience to climate change depends on its risk management approach, business plan and governance structure. Unfortunately most companies do not have access to the appropriate climate data to properly plan and reduce their physical climate risk.
Physical climate risk impacts not only facilities, but also supply chains, distribution networks, customers and markets.
Supply chains are very vulnerable to natural disasters brought on by rapid climate change. Wildfires in California shut down rail lines and trucking routes; in 2016 flooding shut down major refineries in Louisiana. In 2014, of the top five supply chain disruptions, three were due to natural disasters. The top three supply chain disruptions resulted in over $15 billion in economic loss and required on average 38 weeks for system recovery.
Climate change is increasing cost of production, reducing speed and responsiveness of delivery and reducing quality of goods and services produced. Further, due to just-in time production and delivery, shelves are not that deep which would mean even slight delays could have a significant impact on the delivery of a product…
