Risk Reduction and Building Resilience
Framework Step 1: Identify
What Are the Climate Risks to Critical Supply Chains?
You will need to understand your agency’s procurement methods, the goods and services acquired by the agency and provided either internally or externally of the agency, and as much geographic specificity about the steps in the chain as possible. The better your understanding of the supply chain, the better the risk assessment will be. Contractors and subcontractors may be able to provide additional specifics about each step in the supply chain.
Critical Supply Chains
Identify Critical Supply Chains
|Hundreds, if not thousands, of global supply chains support Federal agencies’ operations on a day-to-day basis. However, not all of these supply chains are vital for agencies to fulfill their core functions. By identifying the critical supply chains, agencies can most effectively prioritize the at-risk supply chains that would result in the most significant consequences if disrupted.
Additionally, it is important to notify GSA if your agency purchases critical products and services through GSA channels. Although the core risk-management responsibilities still lie with your agency, there may be opportunities to partner with GSA to address vulnerabilities.
In order to manage risk, a first step is to identify the risks. The primary elements of identifying climate risks to supply chains are:
- Identify critical supply chains
- Identify the climate-sensitive elements of supply chains
- Identify key climate threats
Some Federal agencies have already identified critical supply chains. If your agency has already identified which supply chains are critical, move on to identifying the climate-sensitive elements of the supply chain.
If your agency has not identified critical supply chains, some factors to consider include:
- What are the critical services provided by your agency?
- What supply chain(s) support these critical services?
- What historical disruptions have had the greatest impact on the agency’s ability to fulfill critical services? Your agency’s Office of Mission Assurance or continuity of operations planners may be good source of this information.
- What disrupted supply chain(s) most impacted your agency’s mission?
- Which goods and services are most time-sensitive for delivery?
- Which goods and services require the most significant investment of time and resources by the agency, its contractors, and subcontractors to acquire?
- What are your agency’s top budgetary "spend" areas?
- Which contracts (and contractors) support these spend areas?
Only critical supply chains need to be advanced through the rest of this process.
Map Out Critical Supply Chains
Map out, through maps, flow charts, or other forms, the steps between raw materials and product or service delivery for the critical supply chain to the extent possible. Also determine where, geographically, each link in the supply chain resides, if possible, using online mapping applications. Supplier/contractor addresses in the Federal Procurement Data System can provide some key locations in which supply chains exist. Identify the locations on which the supply chain is reliant, such as important ports of entry, production facilities, or key transportation routes. If needed, engage contractors or external consultants to assist with this process.
Information on the supply chain steps and geographic locations is helpful in characterizing the potential exposure of each link to different weather and climate variables.
Many supply chains have a global reach, with the production, transport, and supporting energy and IT networks spanning numerous parts of the world. This complexity can make it challenging to understand your agency’s supply chain. In many instances, agencies do not have visibility beyond the first one or two layers of the supply chain due to the structure of relationships to contractors (i.e., they do not have insight into the actions of subcontractors several layers down). It can, therefore, be difficult to comprehensively identify and assess the full extent of climate risks to the entire supply chain.
In these circumstances, consider the level of risk to supply chains that your agency is able or willing to tolerate (i.e., the minimum information regarding the sourcing, locations, and transportation within supply chain elements that your agency considers necessary to continue to operate as well as what information is not needed). This level of risk tolerance will help determine if more detail is needed to manage supply chain risk.
Climate-Sensitive Elements of Supply Chains
Identify the Climate-Sensitive Elements of the Supply Chain
|The goal at this stage is to determine what type of climate information to collect. There is an opportunity later in this framework to assess in more detail how sensitive the supply chain is to particular climate threats.|
|GSA’s Professional Services Schedule, 00CORP, contains Category 899 1, Environmental Consulting Services. The services include climate adaptation and resiliency planning and implementation support, including identifying climate risks and impacts, applying and interpreting climate and impact assessment model outputs, development of solutions to manage climate risks, and other related services. Throughout the process of assessing climate risks to supply chains, consider whether your agency would benefit from seeking out these services.|
Consider what elements of the supply chain are sensitive to climate by answering these broad yes/no questions:
- Does weather (e.g., temperature, rainfall or drought, snow, hurricanes, coastal flooding) directly influence any step in the supply chain (e.g., consider if any raw materials are agricultural commodities)?
- Are the raw materials in the supply chain sensitive to changes in climate or extreme weather?
- Are the raw materials in the supply chain in geographic locations that are highly sensitive to climate or weather?
- Are the modes of transportation used likely to be affected by climate or extreme weather (e.g., does the supply chain depend on seasonal ice roads)?
- Is delivery of goods or services likely to be affected by weather?
- Does the timing or availability of any materials depend on weather (e.g., temperature, rainfall, snow)?
- Is the supply chain sourcing, inputs, and transportation flexible to accommodate disruptions?
- Can materials be sourced from other locations or use different delivery modes? The less flexible it is, the more likely it is to be sensitive to climate risk.
Based on the responses to these questions, determine if the critical supply chain is sensitive to weather and climate.
Key Climate Threats
Identify Key Climate Threats
Determine which climate threats could affect the critical supply chain and should be considered in more depth.
Identify climate threats that (1) are geographically relevant (i.e., could occur at any point along the supply chain); and (2) could affect the supply chain elements or activities. Also consider the timing of expected changes to climate. Many contracts only extend a few years, so increases in the frequency and severity of extreme weather events might be more pressing than gradual changes in temperature over many years.
Information collected in this step will be informative for the following sections when identifying the likelihood and magnitude of consequences of climate threats. It may be beneficial to bring in an external consultant to assist with identifying and processing the climate information.
Examples of the kinds of climate threats that can affect supply chains are:
- Extreme heat waves
- Changes in temperature (e.g., affecting growing seasons, freeze/thaw cycles, plant hardiness zones)
- Extreme precipitation events (and resultant flooding, erosion, landslides, and/or sedimentation)
- Sea level rise
- Tropical storms and hurricanes
- Heavy winds (e.g., gust strength, duration of sustained winds, frequency of wind events)
- Winter Weather
A range of weather and climate related threats can affect supply chains both domestically and internationally. While historical climate information can provide a strong understanding of past exposure to climate threats, it cannot provide a confident forecast of climate impacts to future investments or long-term operations. While finding the right information for agency needs can be challenging, there are several publicly available resources that are useful for considering climate risks, listed below.
The National Climate Assessment provides information on United States regional and state-level changes in the frequency and intensity of climate threats. If the identified supply chain is geographically-constrained (e.g., shipping along a given route, manufacturing in a specific city), it may be useful to identify locally-specific climate data to gain a more specific understanding of the potential impacts to the supply chain. Currently, the most comprehensive “one-stop shop” for climate data is the U.S. Climate Resilience Toolkit. Specifically, the Climate Explorer provides an easy way to explore geographic-based data layers, and the Tools section provides a host of additional data resources.
For international climate projections (with regional impacts), see the Intergovernmental Panel on Climate Change’s (IPCC) Climate Change 2014: Impacts, Adaptation, and Vulnerability report.
Projections of future climate are usually scenario-based (as opposed to predictions based on singular assumptions) and provide a range of values that account for the uncertainties involved in climate modeling, including:
- The quantity of future greenhouse gas (GHG) emissions (which depends on the rate and nature of population and economic growth, technological change, and mitigation policies);
- Climate variability; and
- Model uncertainty.
Risk analyses are most robust when they consider a plausible range of future climate scenarios rather than a single predicted value. To learn more about climate scenarios, see the "Modeling Our Climate Future" video provided by the National Science Foudnation.
Timescale of Climate Threats
Different climate impacts will occur over different timescales. Some climate impacts are already occurring and will increase significantly in the short and long term, such as the increased frequency of extreme weather events (e.g., hurricanes, blizzards, heat waves). Other changes in climate (e.g., sea level rise, increases in the average temperature, and changes in precipitation trends) will be more gradual (occurring over many decades). Do not underestimate long-term changes. They could pose more permanent threats to ecosystems, economies, transportation, and other systems essential for the supply chain.
Content developed by the the Office of Acquisition Management, Federal Acquisition Service, General Services Administration.