Back to Articles | « Previous | Next »
Home » Covid-19 Hit Supply Chains Hard. Climate Shocks May Hurt More

Covid-19 Hit Supply Chains Hard. Climate Shocks May Hurt More

Covid-19 Hit Supply Chains Hard. Climate Shocks May Hurt More

Companies aren’t doing enough to map out risks from freak weather, say experts.

The pandemic has tied a series of paralyzing knots in the global economy, but beyond the transportation delays and parts shortages lies a more enduring challenge for supply chains: climate change.

Consider that last year alone saw Hurricane Ida, a typhoon near Chinese ports, the Texas freeze, British Columbia flooding, and freak December tornadoes across the U.S., and it’s clear that global trade is struggling to cope with much more than a health crisis. As temperatures creep higher, nature is likely to be a more frequent, intense, and random economic disrupter.

An analysis of 405 extreme weather events over the past decade by Carbon Brief, a website in London devoted to climate science, shows that 70% were more likely to occur, or made more severe, because of global warming. “It’s not the next big supply chain crisis. It’s the next big supply chain crises, plural,” says Jason Jay, director of the Sustainability Initiative at the MIT Sloan School of Management. “What it ends up looking like is a set of individual crises in different places at different times. They’re hitting a different part of the supply chain, and they’re hitting it in a somewhat unpredictable way.”

Much like the pandemic, extreme weather events are acute and hard to protect against. They begin in one region but can quickly ripple through supply chains, affecting production and delivery times. In Texas, where temperatures dropped to record lows in February, the petrochemical industry was disrupted for days, affecting the supply of resins and plastics, as well as that of widely used chemicals such as citric acid and carbon dioxide, according to a report from North Carolina State University.




Companies aren’t doing enough to map out risks from freak weather, say experts.
Sticker