SUSTAINABILITY
the Task Force on Climate-related Financial Disclosures ( TCFD ), which is just one among many initiatives that calls for corporate disclosures of climate-related physical risks .
The guidance also provides resources to guide climate-related risk assessment and disclosures , which can focus a business ’ s climate-focused priorities .
Data is also vitally important in the managing of climate risk , according to Chi . “ Use a data-driven process to map your supplier ecosystem to multiple tiers and criticality thresholds ,” he advises .
“ Companies without supply chain risk management visibility and strategy lack the insight to anticipate risk across their extended ecosystem . Your organisation must know if highly interconnected supply chain networks are exposing your organisation to risk that may severely affect operations .” As such , Chi advocates for visibility on ecosystems to reach at least three tiers of the supply chain .
Progressive enterprises model climaterelated supply chain shock scenarios as a form of preparation and training , says Chi . “ This allows them to prioritise the extent of supply shocks and determine how to mitigate , going forward . Organisations that have mapped their supply chains and prioritised risk scenarios can model high-risk disruption events into their ecosystem .”
Digital-twin tech vital for impact assessment Chi believes digital twin technology can also be used for impact assessments of various climate-driven events , such as fires , floods , and tectonic events . “ Today ’ s risk scenarios consider several , product-specific inputs , such as supplier network reliance , financial cruciality , product-specific complexity , and supplier resilience .”
Chi goes on to explain that , in general , supply chain risk-mitigation strategies are categorised as ‘ bridging ’ and ‘ buffering ’, and
92 February 2023