The Inherent Risk of Climate Change Becoming a Hindrance in a Business Supply Chain

Abstract

Purpose: A sophisticated network of interconnected supply chains serves as the central organising principle for most of the manufacturing serving the global economy. Right from computers and vehicles to life-saving pharmaceuticals and food is made possible by the supply web. The final goods part of a supply chain may include thousands of components from various global regions. These supply chains have been refined to achieve the highest speed and efficiency.

Methodology: This study includes a sample of 127 firms that have been in business for at least 15 years and are familiar with business dynamics. The authors anticipate how climate risks, common in global supply networks, will evolve over the next several decades. This study examines the vulnerability of nine commercial value chains to climatic disasters. Also, it explores company and value chain vulnerabilities, financial losses, and adaptation or strategic methods to increase resilience.

Findings: Companies must plan forward in terms of locations by retaining operational facilities while running new operations in less risky places. Without change, supply networks will become unstable and dangerous shortly. Using their climate objectives, businesses must decarbonise their supply chains. Businesses should connect with suppliers longer-term. The quality and dependability of a company’s suppliers affect its success and safety. Future-focussed corporations are already engaging their suppliers on health, safety, and environmental issues.

Significance: The typology may be helpful to executives as they make decisions about the strategic option(s) they wish to pick to address climate change. These decisions can also be influenced by the insights provided by the research about the present status of operations of other firms from different sectors all over the globe.

Citation

Gupta, C. and Bhatia, S. (2023), "The Inherent Risk of Climate Change Becoming a Hindrance in a Business Supply Chain", Grima, S., Sood, K. and Özen, E. (Ed.) Contemporary Studies of Risks in Emerging Technology, Part A (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 127-137. https://doi.org/10.1108/978-1-80455-562-020231009