Resilient supply chains

1. Outline

Access to food, goods and services is essential to the functioning of the UK’s economy and to people’s wellbeing. These are provided through a complex set of trading relationships within the UK and with the rest of the world. Climate change, both in the UK and abroad, can stress these supply chains causing price rises, disruptions, delays and even failures in the supply of goods and services. This briefing summarises the evidence on climate-related risks to UK supply chains and the adaptation actions which can build resilience and maintain functioning supply chains. 

2. Key messages

The key conclusions are: 

• Risks are increasingly complex and are rising for domestic and international supply chains. 
• Some supply chains may be at higher risk due to being geographically concentrated or having more vulnerable logistics or production processes.  
• Businesses can take a range of actions now to help manage supply chain risks. 
• Clear frameworks are needed from Government to support businesses to build resilient supply chains. 

3. Recommendations

Table 1

Recommendations - Resilient supply chains

Department	Responsibility	Recommendation
DIT	Stress Testing and ensuring resilience of critical supply chains and systems	Carry out stress testing exercises to understand the resilience of essential goods supply chains. This should include assessing the effectiveness of solutions like parallel supply chains or diversifying supplier locations based on assessments of climate risk.
DfT	Stress Testing and ensuring resilience of critical supply chains and systems	Identify key dependencies of the transport system such as providing access to medicine or clean water. It should assess how it can make resilient the transport infrastructure and services these rely on as part of its climate change adaptation strategy.
Defra	Stress Testing and ensuring resilience of critical supply chains and systems	Set out specifically how it will implement the Government’s Food Strategy with regard to making UK food supply chains more resilient to extreme weather. This should include funding innovative farming approaches, improving data on current disruptions and future risks and ensuring there are minimum environmental and health standards for determining future trading relationships for food.
BEIS	Stress Testing and ensuring resilience of critical supply chains and systems	Ensure that resilience to extreme weather and climate change is part of industrial and security strategies such as the British Energy Security and Critical Minerals strategies. It should also consider ways it can support businesses and energy companies to improve their resilience through facilitating provision and sharing of information.
Cabinet Office	Stress Testing and ensuring resilience of critical supply chains and systems	Carry out a review of the impacts of recent supply chain disruption and how businesses and governments responded. It should use the findings from this review as part of building a strong resilience capability for the UK by taking an overarching view of systemic and interacting risks. This could include an early warning system for global climate shocks and enhancing the ability of the Government to make fast decisions by bringing in technical advice and expertise quickly when needed, and both protecting, and enhancing, monitoring and surveillance systems to enable faster reactions as events unfold.
Defra	Reporting	Act on the Climate Change Committee’s recommendations to improve the effectiveness of the Adaptation Reporting Power (ARP). In particular, making the next ARP cycle mandatory and extending the scope to include relevant local authority functions in England, more health and social care organisations, canals, reservoirs and food supply chains. Defra should also ensure that all organisations who meet the criteria for participation are being invited to report.
HMT	Reporting	Ensure that its Sustainability Disclosure Requirements and supporting policies result in large businesses disclosing their current and future supply chain risks from extreme weather and climate change. This should include reporting the financial impacts of supply chain disruption and considering multiple climate change scenarios.
FCDO	International and Trade Policy	Increase capacity building through its overseas programmes to improve global capacity for climate resilience, including supply chains, health systems and early warning systems for climate hazards. Overseas programmes should work to reduce underlying vulnerabilities to climate risks and not just respond to disasters.