Is climate change a larger supply chain disrupter than COVID-19?

The fact is that wildfires in the American West, the floods in China and Europe and the drought in South America are all playing a role in disrupting supplies of everything from lumber to chocolate and even sushi rise.
supply chain disruption due to climate change

According to John Sterman, a professor of management at MIT’s Sloan School of Management, the best way for a company to protect itself and its supply chain from climate changes is by proactively reducing its own carbon footprint. Let’s face the fact. Companies cannot credibly address the climate risk without actually disclosing and reducing their own supply chain emissions.

Must Read: How Global Supply Chains Feel the Turmoil of the New Rising Covid-19 Cases

The inception of the coronavirus pandemic caused unprecedented, worldwide supply-chain disruptions, but according to what experts say, we’ve noted that COVID-19 was just a drop in the bucket as compared to the disruptions that climate change will cause. Here’s how:

As per a recent analysis of 50 of the highest-emitting North American food companies, it was discovered that most of them did not even measure and disclose supply chain emissions, let alone including them in their targets. 70% of these companies do not disclose emissions from agriculture, more than 80% do not disclose emissions from land-use change and over 60% do not disclose any scope 3 supply chain emissions. This leaves us all in dismay.

Although some companies are rolling out net-zero commitments, it is high time for businesses to show how will they exactly plan on delivering on these goals. Similarly, taking a lead from the growing scrutiny of how seriously companies are taking these commitments, investors are looking for evidence that companies have credible plans and science-based targets to reduce their emissions in the near term, alongside the long-term net-zero ambitions.

Did you know investors are issuing urgent call to action for companies to raise their ambition to disclose emissions, set targets, and implement climate-transition action plans?

Interesting Read: How Should Businesses Respond to Supply Chain Inadequacies

Now, it’s obvious that the impacts of climate change that we’re already experiencing today like wildfires, droughts, extreme weathers, crop yield declines, water shortage, intense hurricanes, and the political disruption that comes from the forced migration and political instability it generates are all enormous reasons for the rising stress to many supply chains of companies and not just ones that make physical products.

Whether you’re in the agricultural industry, forestry, or tech, no particular sector is immune to climate change. In fact, the extreme weather events also hit supply chains when workers are unable to physically get to their jobs.

Did you know workplace disruptions caused by climate change could lead to more than $2 trillion in productivity losses by 2030? According to a recent report from the United Nations Development Program, this was proved to be true!

Recommended Read: How Important is Digitization of Supply Chain in 2021?

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