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How Can Your Organization Mitigate the Risk Climate Change Imposes on the Supply Chain?

Globally, we’re starting to see the impacts of climate change as record-breaking weather anomalies, such as uncontrollable wildfires, heat waves, droughts, and devastating floods. These extreme weather events are causing profound effects on the supply chain, which in turn, is affecting many companies’ ability to conduct business across industries. As a management consulting firm, we understand that climate change can be hard to plan for as an organization; however, we know it’s not impossible. We believe that there are three steps a company can take to mitigate the risks imposed by climate change. 

1. Map out your Supply Chain  

First and foremost, you’ll need to work with each department in your organization to accurately identify all of your current suppliers, as well as your supplier’s suppliers. Once identified, you’ll want to research the weather patterns and significant swings in environmental changes (e.g., barge traffic on the Mississippi, hurricanes impacting seaports, diminished food supplies from droughts, etc.) associated with their location and their impact on transportation infrastructure.  

It’s important to note that you can “sole source” from a supplier if you have multi-source capability and capacity. For example, you can sole source a product to obtain lower pricing, but you’ll need to have another supplier that you buy other products from that can have the capability and capacity to produce your sole sourced product. Mapping these relationships is critical in establishing supply chain contingency plans. 

2. Build Stronger Relationships with your Suppliers 

Communication is vital in any relationship; however, with your suppliers, you must create a relationship built on solid communication, as you’ll need to collaboratively design a comprehensive strategy to prepare you for any future supply chain disruptions.   

For some organizations, that will mean producing more product so that it can be stored in warehouses, and for others, it may mean installing solar panels because they’re connected to an unstable power grid.  

3. The Best Way to Fix a Problem is to Not to be a Part of the Problem 

If your organization is concerned about how climate change will affect its bottom line, it should focus on ways to curb its carbon footprint while improving its resilience. This requires comprehensive planning which incorporates sustainability into the organization’s operational strategy. This also requires performing a comprehensive risk assessment of your supply chain to develop a risk mitigation strategy. The risk assessment should be performed annually, and in some cases where companies operate in the most volatile parts of the world both environmentally and economically, more frequently.  


SAGIN, LLC is a professional services firm which provides services in consulting, technology and talent management. If you would like to learn more about these solutions you can contact us at: +1.312.281.0290 or Also visit us at 

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