Over 70 per cent of supply chain professionals fail to conduct a climate change risk assessments to identify key risks, according to the analyst Gartner.
The study found that 27 per cent of supply chain leaders conducted a climate change risk assessment to identify their most critical supply chain risks. In addition, 18 per cent said they had not only conducted risk assessments, but completed climate-related scenario planning.
But most respondents to the survey had only a vague idea of the potential impact of climate change on their supply chains. Most – 44 per cent – said, “we have a general sense of potential future climate risks based on events from the last three years.”
“The effects of climate change are hard to predict, but it is possible to model the risks and opportunities that might occur,” said Heather Wheatley, senior director analyst with the Gartner Supply Chain practice. “Chief supply chain officers regularly assess various risks and opportunities as part of normal business – this must be done for climate change as well.”
The analyst said that short term decision making prevented organisations from planning for climate change threats. In addition, few organisations succeeded in linking climate adaptation to their investment decisions. One option is to use a shadow carbon price. That effectively transforms a future risk into a present-day operational cost, said Gartner.
Fewer than one in five (19 per cent) surveyed companies used digital technologies to understand climate change risk. The few business that did use such technologies focused on predictive analytics. Businesses also used geospatial analysis, drones and artificial intelligence for, for example, creating ecological simulations.
IRM’s Supply Chain Risk Management Certificate enables risk professionals to identify, assess and mitigate supply chain risk. Module six of the course also shows participants how to use big data and predictive analytics to manage supply chain risk.
Click here for more information on the certificate.
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