Climate Change and Adaptation in Global Supply-Chain Networks
Event details
Date | 09.12.2022 |
Hour | 10:30 › 12:00 |
Speaker | Nora M. Pankratz - The Fed |
Location |
UniL Campus, Room Extra 126
|
Category | Conferences - Seminars |
Event Language | English |
This paper examines how physical climate risks affect firms’ financial performance and operational risk management in global supply-chains. We document that weather shocks at supplier locations reduce the operating performance of suppliers and their customers. Further, customers respond to perceived changes in suppliers’ climate-risk exposure: When realized shocks exceed ex-ante expectations, customers are 6-11% more likely to terminate existing supplier-relationships. Consistent with models of experience-based learning, this effect increases with signal strength and repetition, is insensitive to long-term climate projections, and increases with industry competitiveness and decreases with supply-chain integration. Customers subsequently choose replacement suppliers with lower expected climate-risk exposure.
Practical information
- Informed public
- Free