Understanding climate risk externalities through the global supply chains: a framework and review of the literature on existing approaches

Abstract

Purpose

Businesses are increasingly vulnerable and exposed to physical climate change risks, which can cascade through local, national and international supply chains. Currently, few methodologies can capture how physical risks impact businesses via the supply chains, yet outside the business literature, methodologies such as sustainability assessments can assess cascading impacts.

Design/methodology/approach

Adopting a scoping review framework by Arksey and O'Malley (2005) and the PRISMA extension for scoping reviews (PRISMA-ScR), this paper reviews 27 articles that assess climate risk in supply chains.

Findings

The literature on supply chain risks of climate change using quantitative techniques is limited. Our review confirms that no research adopts sustainability assessment methods to assess climate risk at a business-level.

Originality/value

Alongside the need to quantify physical risks to businesses is the growing awareness that climate change impacts traverse global supply chains. We review the state of the literature on methodological approaches and identify the opportunities for researchers to use sustainability assessment methods to assess climate risk in the supply chains of an individual business.

Citation

Mora, C.J., Malik, A., Shanmuga, S. and Sidhu, B. (2024), "Understanding climate risk externalities through the global supply chains: a framework and review of the literature on existing approaches", Journal of Accounting Literature, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAL-06-2023-0105