Strengthening Supply Chain Resilience: Identifying climate risks and taking adaptation measures
On 13 September 2022, the online workshop "Strengthening supply chain resilience: identifying climate risks and taking adaptation measures" was held as part of the Climate Adaptation Week organized by the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV). The event provided an overview of climate risks for the globally interconnected German economy and showed how companies can deal with these risks.
The effects of climate change, such as floods, droughts, rising temperatures and water scarcity, have far-reaching consequences for business, industry and infrastructure. German companies are also increasingly exposed to climate risks, both through climate risks in Germany and through the international extraction of raw materials and interconnected value and supply chains. The numerous supply disruptions following extreme weather events demonstrate the high vulnerability of the international trading system, e.g. Hurricane Sandy in 2012 in the USA or the floods in Germany in 2021. In addition to reducing greenhouse gases, it is therefore important for companies to identify their own climate risks and increase their resilience to supply chain disruptions.
The workshop provided an overview of climate change risks for German companies and presented concrete tools for identifying and assessing corporate climate risks and adaptation measures.
Madeleine Guyer from INFRAS presented the ImpactCHAIN project of the German Federal Environment Agency, which analyzed international climate impact channels on Germany with a focus on trade flows. The results of the project show that the risks from international climate impacts through trade channels alone are expected to be at least as large as the sum of national climate impacts in Germany by mid-century.
- Publication of ImpactCHAIN project (in German)
Oliver Lühr from PROGNOS discussed how climate change is expected to have an impact on various business risks, including process risks at the production site. In the supply chain, the focus is on procurement and demand risks, which include, for example, the impairment of transport infrastructures or energy and water supply at suppliers. To assess climate change impacts, PROGNOS has developed the KLIMACHECK tool as part of a project for the BMWK. The KLIMACHECK tool is suitable for the identification of climate-related risks and the development of initial approaches for dealing with these risks.
Johannes Schmiester, WWF, presented the Water Risk Filter, a precise tool that enables the assessment of risks associated with water resources along corporate supply chains. On this basis, proposed response measures for the company can be derived.
Sebastian Homm, GIZ, presented another tool, the Climate Expert Tool. The Climate Expert Tool is a tool and training concept that supports the private sector in adapting to climate change and strengthens local advisory skills.
Later in the event, participants discussed which measures can be taken by companies or the government to increase the climate resilience of supply chains. The following points were discussed:
- Activities to disseminate information and raise awareness with a focus on companies and multipliers in partner countries and in Germany
- Networking and exchange with actors along the supply chain
- Intensive partner cultivation and investment in existing supply chains
- Promotion of risk assessment and analysis through climate risk assessment tools
- Voluntary integration of climate risk analysis into upcoming reporting on the Act on Corporate Due Diligence Obligations in Supply Chains
- Joint consideration of different business risks
The workshop documentation summarizes further information on the various presentations and recommendations, including further links.