Climate Change Risks and Supply Chain Responsibility
How should companies respond when extreme weather affects small-scale producers in their supply chain?
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How is climate change affecting small-scale producers in developing countries, and what role can companies play in strengthening the capacity of these producers to adapt, and in doing so, making their global value chains more resilient?
While some leading companies have made progress in taking greater responsibility for what happens throughout their supply chains, there has been little discussion about the threat that climate change poses to the livelihoods of small-scale producers and the role that companies can play in helping them to adapt.
Through interviews with three companies: Starbucks, Marks & Spencer, and The Body Shop, the paper examines how smallholders involved in coffee production in Colombia, sesame in Nicaragua, and cotton in Pakistan have been affected by climate change and what it means for the companies’ businesses.
From this research, Oxfam identifies key actions for companies to begin to address the challenges to small-scale producers:
- Raise awareness and understanding of adaptation within the business;
- Ask producers about current climate trends and impacts;
- Build longer-term and more stable relationships with suppliers;
- Support community development and environmental sustainability;
- Work through existing institutions, including governments.
Oxfam calls for further discussion on:
- How finance can be mobilized to support adaptation;
- How the flow of information can be improved;
- Whether producers can diversify their supply base too;
- How business models will need to change; and
- What would be a responsible exit strategy.