Measure Your Exposure

Attempting to measure your exposure to climate, environmental, or social risk in one go will most likely be overwhelming and not deliver results.  Instead the process should be broken down into steps, each getting into a deeper level of detail.

Step 1: Segment the supply chain by high level commonalities, for example related product categories, shared geographic location, shared logistical paths, or other defining feature.

Step 2: For each segment conduct a rapid risk assessment, identifying the possible climate, environment, or social risks that might apply. Order segments by level of concern arising.

Step 3: Taking the segment with highest concern, conduct supplier engagement surveys to gather data to quantify the likelihood of identified risks, and solicit as-yet unidentified risks from suppliers. Use technology to facilitate this engagement.

Step 4: Analyse the collected data and assess the impact and exposure to each risk.

Step 5: With a greater understanding of your exposure in the segment of most concern, you are ready to take action. You can also repeat steps 3, 4, and 5 for other concerning segments to build a risk portfolio.