Building a More Resilient Supply Chain

The supply chain can be considered an extension of a company’s workforce. As is the case with cybersecurity, mandates by large businesses for protective measures, oversight, and insurance coverage in their supply chain enhances resilience for all parties. Climate change poses a similar threat to global supply chains, and guidance is beginning to reflect the necessity for large businesses to set measurable, time-bound, climate- and resilience-related targets for their suppliers.

BSR’s latest supply chain report shows that throughout Thailand’s severe flooding in 2011, more than 14,500 businesses dependent on Thai suppliers endured business disruptions globally and total insured losses were assessed between $15 billion and $20 billion.

Mandating climate-related risk analysis coupled with sustainability and resilience measures throughout a supply chain would, therefore, appear at first blush to make a lot of sense. However, without considering gender in this work, large companies risk adversely impacting women-owned enterprises in their networks.

This is because, from the very start, women-owned enterprises tend to be backed with only a fraction of the capital that male-owned businesses enjoy. This lack of capital plagues women-owned ventures through their lifetime; challenges of raising funding while female are well-documented. For women in developing countries, capital challenges are even more acute. And along the way, even well-intentioned but poorly conceived supplier diversity requirements may have unintended consequences, explains Geri Stengel in a recent Forbes article, including quashing the ability for women to secure outside investment needed to grow.

Women-owned businesses can play a key role in growing redundancy and diversity in supply chains. As supply chain disruptions become more frequent due to climate-related impacts and other chronic stressors and acute shocks, corporations need to focus on mainstreaming resilience into their supply chains—and increasing redundancy and diversity are two key strategies. In fact, supply chain audits and diversity can also result in lower carbon intensities, higher environmental and labor standards, and greater opportunities for women- and minority-owned businesses (McKinsey report).

Further, women-owned enterprises build resilience for women and their communities; they help women earn income while blazing trails that inspire communities to invest in educating and empowering girls. Coming full circle, returning to Project Drawdown’s report on education and access to family planning as one of the largest projected emissions reductions strategies, one can see how keeping women in business throughout supply chains can have a positive impact on emissions reductions as well as resilience.

Building Resilient Workforces

5. Action Steps

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