Climate Risk Propagation and Supply Chain Diversification

Investigators

• Yi Qian
• Leyao Tan
• Jiong Sun
   

Co-Investigators

• Leyao Tan

Background

Climate risks, such as extreme weather events, resource shortages, and regulatory shifts, can disrupt global supply chains, leading to financial losses and operational instability. These risks propagate through interconnected networks, amplifying vulnerabilities for businesses reliant on concentrated suppliers or regions. Supply chain diversification is often proposed as a strategy to enhance resilience, but its effectiveness depends on factors such as cost, feasibility, and geopolitical considerations. Understanding how climate risks spread and how diversification strategies mitigate disruptions is crucial for building adaptive and sustainable supply chains.
 

Research Objectives

This study aims to examine the relationship between climate risk propagation and supply chain diversification. It will analyze how climate-related disruptions affect different tiers of supply networks, assess the effectiveness of diversification in mitigating these risks, and explore the trade-offs businesses face when implementing diversification strategies. The findings will provide insights for businesses, policymakers, and supply chain managers seeking to enhance resilience in the face of growing climate uncertainty.