Climate Resilience Planning: Adapting Supply Chains to Extreme Weather

Extreme weather events, such as hurricanes, droughts, heatwaves, and wildfires, are increasing in frequency and intensity, transforming from occasional risks to consistent operational threats. The data is clear: human-caused climate change is reshaping the business landscape.

For global organizations, this new reality translates directly into tangible supply chain disruptions. Roads, ports, and raw material sourcing are now routinely compromised, creating massive economic uncertainty and threatening continuity. Your team needs a framework to anticipate and mitigate these escalating risks.

You cannot manage risk you haven’t mapped. Building climate resilience is now a necessary component of your core ESG strategy and requires moving beyond reactive damage control.

This guide provides a four-step framework for organizations to proactively assess vulnerabilities, implement essential adaptation measures, and secure a resilient future for their supply chain.

Understanding Extreme Weather

Extreme weather refers to climate-driven events like hurricanes, floods, droughts, heatwaves, and wildfires. The Intergovernmental Panel on Climate Change (IPCC) confirms in its Sixth Assessment Report that human-caused climate change is increasing both the frequency and intensity of these events.

According to the World Meteorological Organization (WMO), there is an 86% chance that at least one of the next five years will be more than 1.5°C warmer than pre-industrial level leading to continued record-breaking trends of global temperatures.

“We have just experienced the ten warmest years on record… with growing negative impacts on our economies, ecosystems, and daily lives.”

WMO Global Climate Predictions press release

Even modest warming is expected to trigger more heatwaves, heavier rainfall, droughts, and sea-level rise, all of which threaten the systems that regulate the planet’s climate and sustain global supply chains.

The Impact of Extreme Weather on Supply Chains

Climate change now touches nearly every link in the global value chain. In a 2024 Economist Impact survey, 99% of executives reported that their supply chains are being affected by climate change. Extreme weather impacts both upstream and downstream operations, disrupting raw material sourcing, manufacturing, logistics, and customer delivery.

Common Supply Chain Disruptions

According to Maersk and the World Economic Forum, the following represent the most frequent and costly forms of disruption:

• Flooding damages infrastructure – Roads, ports, and warehouses are submerged, halting the movement of goods.

• Heatwaves disrupt transportation – Extreme heat warps rail tracks, degrades roads, and overheats vehicles. It can also affect the health and safety of the workers operating and commuting during heatwaves.

• Storms and hurricanes delay shipping – Severe weather forces port closures and damages cargo.

• Droughts restrict waterborne transport – Rivers and canals dry up, reducing vessel capacity or halting shipping altogether.

• Regional climate shocks – Wildfires, blizzards, and extreme heatwaves can shut down suppliers or create logistical bottlenecks.

The economic toll is rising fast. The World Economic Forum’s 2024 “Business on the Edge” report estimates that fixed asset losses from climate hazards could reach $560–  $610 billion per year by 2035. In the U.S. alone, the cost of climate disasters has risen from $21.8 billion per year in the 1980s to $123 billion annually over the past five years.

Many companies are learning that climate resilience depends not only on modeling risk — but on integrating those insights into operational decisions. As we explored in our piece on turning ESG disclosures into real impact, the real advantage comes when reporting data informs day-to-day strategy.

Building a Climate-Resilient Supply Chain

The first step in resilience planning is understanding where your supply chain is exposed to risk. Moving from a reactive to a resilient model requires focused investment across five strategic components.

1. Identify Vulnerabilities

• Map climate risks by identifying suppliers, facilities, and transport routes that are the most vulnerable to extreme weather.

• Analyze dependencies by determining which materials and operations are critical to continuity.

• Use climate data tools by leveraging geospatial and scenario modeling to stress-test facilities and routes.

---

Example:

AT&T partnered with the Argonne National Laboratory to use the Climate Risk and Resilience Portal (ClimRR), assessing how flood risks could impact its telecommunications infrastructure.

It then made the data from this collaboration publicly available. This kind of proactive risk mapping helps companies adapt before disruption strikes.

It also underlines the importance of data sharing and coopetition, or the act of both cooperation and competition between businesses, as integral to the advancement of sustainability measures in every industry. 

---

2. Diversify Supply Chains

Dependence on single suppliers or regions increases exposure to localized climate shocks. Strategic diversification builds immediate redundancy into operations.

• Source from multiple geographies to reduce risk concentration.

• Build redundancy into logistics and warehousing networks.

• Integrate climate risk metrics into procurement decisions.
  

Supply chain emissions often represent the largest share of a company’s climate footprint and the hardest to manage. Our article on navigating Scope 3 emissions explores why upstream data transparency is now critical for resilience planning.

3. Collaborate With Suppliers

OBATA’s work with clients consistently shows that resilience requires a partnership approach across the entire value chain. Your suppliers’ risks are your business’s risks.

• Include climate risk assessments in supplier evaluations.

• Offer training and incentives for suppliers to implement adaptation measures.

• Share data and best practices on emissions, waste, and water management.
  

4. Work With Local Communities

Local partnerships strengthen resilience where it matters most.

• Support community adaptation: Invest in infrastructure and programs that protect local workers and residents.

• Protect shared value: Extreme weather affects food security, housing, and public health—all essential for employee stability and customer demand.

• Build inclusive resilience: A resilient community means a resilient business.
  

5. Invest in Technology and AI

Technology can dramatically improve foresight and responsiveness.

• AI and machine learning can forecast climate risks and optimize inventory placement.

• Computer models can test entire supply chains against different future weather problem scenarios.

• IoT sensors monitor infrastructure for temperature, moisture, and structural stress in real time.

Investing in new technologies and skills also contributes to Beyond Value Chain Mitigation, as promoted by the Science Based Targets initiative (SBTi) which strengthens not only corporate operations, but also the broader ecosystem in which they operate.

From Reaction to Resilience

Climate change is no longer a distant threat, it’s a recurring operational reality. The question is not whether extreme weather will disrupt your supply chain, but when and how prepared you’ll be when it does.

Companies that integrate climate resilience into their ESG strategy will be better positioned to safeguard value, maintain continuity, and meet stakeholder expectations.

By identifying vulnerabilities, diversifying suppliers, collaborating across the value chain, and leveraging technology and AI, businesses can transform climate risk into a competitive advantage leading toward a more sustainable and resilient business and global economy.

Need to formalize your supply chain’s climate resilience strategy?

OBATA helps leading organizations assess risk, implement adaptation plans, and integrate resilience into their core corporate reporting.

Contact OBATA to discuss your climate resilience needs. →

Learn more about our Sustainability Consulting Services →