FIS: Preparing for Climate-Related Supply Chain Disruption
Extreme weather events have gone from rare anomalies to increasingly frequent disruptors to global supply chains.
For retailers, climate volatility has become a direct threat to operations, profitability and customer trust.
Climate-driven supply chain disruptions
The events of 2024 highlighted just how exposed supply chains are to climate risk.
The Panama Canal, a vital artery for global trade, recorded its lowest water levels since records began, threatening shipping schedules and inflating costs.
Across the globe, other impacts were felt. Hurricane Helene caused more than US$79bn worth of damage in southern US states, crippling logistics and manufacturing networks.
In Asia, Typhoon Yagi forced the closure of ports and airports in China and Vietnam, delaying shipments by more than two weeks and damaging facilities and inventory. Pakistan and Afghanistan also faced devastating floods, damaging agriculture and transport networks.
Meanwhile, Europe endured record-breaking heatwaves that shut down factories and decimated crops, while severe flooding in eastern Spain destroyed infrastructure and forced widespread shop closures, affecting nearly half of the region’s food producers.
Collectively, these events demonstrate that no region or sector is immune to climate-related disruption.
Fintech giant FIS is inviting senior supply chain, procurement and risk professionals to take part in a survey exploring the impact of climate change on their operations.
To complete the survey, click here.
The cost to retail and logistics
Retailers are bearing the brunt of climate volatility.
Flooded warehouses, destroyed crops, damaged inventory and factory shutdowns translate into severe operational delays and financial losses. Knock-on effects such as port congestion, stock shortages, price spikes and panic buying only exacerbate the strain.
In the US alone, winter storms and wildfires triggered large-scale logistics interruptions and forced costly rerouting of supply flows.
Beyond immediate losses, these events increase insurance premiums, inflate operating costs and erode consumer confidence. According to FIS, the cumulative impact amounts to billions of dollars in lost value annually, threatening both short-term performance and long-term resilience.
Modelling future risks
As the frequency and severity of climate-related events rise, retailers are seeking new ways to safeguard operations, with financial technology fast emerging as a powerful enabler.
FIS has developed its Climate Risk Financial Modeler to provide retailers and supply chain operators with a forward-looking view of risk exposure.
The model uses global climate data, analysed by PwC, combined with finance and insurance metrics to project the effects of different climate scenarios. Retailers can simulate the financial impact of severe weather, from facility damage to supply chain disruption, and even assess how alternate business configurations might change their vulnerability.
Crucially, the tool provides regional and location-specific risk insights, helping companies prioritise mitigation measures.
The FIS Supply Chain Risk Survey is aimed at gathering insights that will help benchmark industry preparedness for future weather-related supply chain disruptions.
Take this opportunity to influence the future of supply chain resilience.
