Just like the impacts experienced during Covid-19, climate change physical risks can be highly local and create a disruption to supply chains. There’s some evidence that companies with long-term, sustainability focused strategies are weathering the consequences of the disruptions better than those who have not. For example, the Good Governance US equity long/short index outperformed the S&P 500 by 0.66 per cent in April 2020.
This report is a result of collaboration between HSBC and The Sustainability Consortium to help companies understand why climate change risks should be addressed within a supply chain risk management program and discuss the options that companies have to create greater supply chain resilience.
The report provides an action-oriented approach to resilience planning in business with steps and strategies to advise any company at any point in its journey toward supply chain resilience. Bridging strategies involve building collaborations with a company’s supply chains to know who they are, how they operate, where they are and what they are doing. Buffering strategies require being able to shift, pivot and buffer yourself from a supplier who might not be able to deliver.
Both strategies are important for supply chain resiliency and involve strategic, long-term planning with social and environmental impacts in mind, much like the strategies used in sustainability. Corporate examples illustrate these approaches throughout the report. This report is a resource for resiliency planning and may have useful strategies for addressing not only climate impacts, but enduring impacts of Covid-19.