Climate change poses new risks to global supply chains which are not widely recognized. The risks are broad and complex because climate impacts are uncertain and modern supply chains are complicated. They must be considered across the whole network as well as for individual assets and resources, which requires an enhanced approach to risk management.
DNV GL has been working together with the World Business Council for Sustainable Development (WBCSD) and their member companies to better understand the effect of climate change on business. We have also tackled the question of how to build resilience, both in relation to companies’ own assets and operations as well as within their wider stakeholder groups.
“This work on supply chains follows our research with WBCSD in 2014 on electrical utilities. In the report, ‘Building a Resilient Power Sector’ we explored the climate change risk that the electrical utilities face and examined how that industry should build resilience. This year we have extended our focus to global supply chains and explored case studies and methodologies with relevance for companies in diverse sectors,” says Bente Pretlove, director of DNV GL’s Climate Change Research Programme.
The latest report ‘Building Resilience in Global Supply Chains’ was released in Paris at the COP21 on Friday 4th December 2015 by the WBCSD. It sets out to raise awareness and trigger meaningful discussions among businesses on the potential climate change risks to global supply chains and how to build resilience. DNV GL was a lead author of the report, collaborating with the wider WBCSD membership.
The approach presented in the report gives guidance from an integrated system perspective to companies on how to manage shocks by understanding their vulnerabilities to climate-related risk and, beyond that, how to proactively build resilience. Two detailed case studies, on a complex manufactured product and on an agricultural commodity contain ‘‘lessons learned’ with relevance to many companies. We have also included guidelines for a 5-step process that we believe will support companies build resilience to the broad range of impacts climate change will inevitably bring.
Further information of DNV GL’s Climate Change Research Programme can be found here.