Article Summary: How Climate Change Is Expected to Transform Manufacturing by Kate Magill

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Writing for Supply Chain Dive, Kate Magill reports on the impact climate change will have on global manufacturing over the coming years. As she recounts, experts predict intense heat, rising sea levels and catastrophic flooding in many places where factories manufacture crucial goods. Companies now have reasons based on clear risk management and crisis management standards to address their own emissions and environmental practices – and to plan ahead.

Take-Aways

• Climate change has disrupted manufacturing with extreme weather phenomena, and it is expected to get worse.
• Excessive heat is one of the most significant issues facing manufacturers.
• Rampant flooding can also bring manufacturing to a halt.
• Companies must control their factories’ emissions as they plan for disruptions and damage due to climate change.

Summary

Climate change has disrupted manufacturing with extreme weather phenomena, and it is expected to get worse.

Over the next two decades, according to the International Panel on Climate Change, the planet’s temperature is expected to rise by 2.7oF (1.5oC). This shift will lead to heat waves, rising sea levels, significant flooding, and more. Each of these phenomena is expected to have a severe impact on manufacturing. These shifts affect how factories work, how organizations plan for the future, and how workers will – or won’t – be able to do their jobs.

Excessive heat is one of the most significant issues facing manufacturers.

The United Nations Human Climate Horizons Project, published in cooperation with the UN Development Programme and the Climate Impact Lab, reports on the ways increasing heat will negatively affect productivity among laborers worldwide. It warns that workers will struggle to remain productive while on the job in sweltering conditions.

The Project reports that the average US employee’s productivity stands to fall 0.4 hours a year from 2040 to 2059 at the current rate of heat increase. The prediction is more severe in hotter regions. India, in particular, will see a steep decline of 19.6 annual workable hours if global warming continues at its current rate. Without a great reduction in emissions, India is likely to have 118 days a year hotter than 95oF (35oC).

“I would want a manufacturer to know that the effects of climate change are going to be much wider. Adapting is really important.” (Hannah Hess, Associate Director, Rhodium Group Energy Climate practice and Climate Impact Lab)

Climate specialist Hannah Hess warns that while these numbers may not sound compelling person by person, the cumulative effect across millions of workers is significant. These losses in productivity portend a serious impact on production and should spur businesses to do more to take care of their workforce as conditions change. Companies in many places will need to provide more frequent breaks and invest in air conditioning and drinking water stations to avoid injury to their employees.

Rampant flooding also can bring manufacturing to a halt.

Smaller manufacturers will be particularly at risk since their infrastructure may not be resilient enough to survive even a single major setback, like a flood, and they may have limited resources. Manufacturers must also pay close attention to where their suppliers are located to avoid supply chain disruption. For example, in June 2023, Abbott Laboratories had to halt manufacturing for weeks due to post-storm flooding.

“The fact that this is likely a conservative underestimate about the effects of climate change on the workforce just points to the importance of that flip side of the coin, which is mitigating and doing your part to reduce emissions.” (Hannah Hess)

According to a Cornell University study and the International Labour Organization, manufacturers and suppliers in low-lying areas of Southeast Asia are at substantial risk of flooding or, in time, even of submersion unless they relocate their facilities to a higher elevation.

Companies must control their factories’ emissions as they plan for disruptions and damage due to climate change.

Climate change is planet-wide. Every organization – particularly every manufacturer – should have a risk assessment strategy that includes planning for climate-related catastrophes.

“I see two directions here. One is we are seeing more and more companies being more concerned about the environment in general. The other thing is from an economic perspective, floods and so forth, these things generate a lot of risk. So how do you deal with all the different risks involved?” (Thomas Kurfess, professor at Georgia Tech’s School of Mechanical Engineering)

For instance, buyers who depend on certain manufacturers must be aware of those factories’ climate risk exposure. As the Cornell report states, “Buyers with very few exceptions do not own factories, and risks such as catastrophic flooding belong to their suppliers.” Companies must also reduce their carbon footprint to avoid potentially disastrous outcomes. The lower the emissions, the less disruptive climate change will be.

As researchers publish their findings, policymakers gain an opportunity to draw from detailed climate research when they establish protocols for worker safety.

About the Author

Kate Magill is an editor at Supply Chain Dive. She is the former editor-in-chief for the American Chamber of Commerce in Shanghai and was a reporter for the Baltimore Sun Media Group.