Framework for climate change risk management in fashion and apparel supply chains
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Journal Title
Journal ISSN
Volume Title
School of Business |
Master's thesis
Authors
Date
2022
Department
Major/Subject
Mcode
Degree programme
Information and Service Management (ISM)
Language
en
Pages
81 + 13
Series
Abstract
The role of supply chain operations in the accumulation of global greenhouse gas emissions and in the progress of climate change has received significant attention in recent years and decades. However, the effects of climate change on supply chain operations have been studied far less. As the increase of the global average temperature and the consequent impacts will be somewhat inevitable, though the exact warming scenario actualizing remains uncertain, studying the risks to supply chain operations is more crucial than ever. Today’s fashion retailers outsource their operations to lower-cost countries mainly in areas most impacted by climate change, making their operations particularly vulnerable. This study aims to identify the effects of climate change on fashion and apparel supply chains and the measures currently taken to adapt to the impacts and to propose a climate change risk management framework. Due to the relatively early stage of research on the topic, the study was conducted using semi-structured interviews. The interview results were analyzed with thematic analysis, identifying themes and patterns in the data, and structuring the results according to key themes. The conceptual framework was created by contrasting the findings of the empirical study with the findings of a review of previous literature. The main findings are as follows. Firstly, the key impacts of climate change on fashion and apparel supply chains are the direct effects of weather events on operations and assets, changes in material prices and availability, and the tightening requirements from consumers, stakeholders, and regulations. Secondly, companies in the industry currently manage these risks by collecting information and building knowledge of the risks, reducing exposure to the risks through evaluating suppliers and incorporating climate change risks in decision-making, and building resilience with long-term key supplier relationships, buffer inventory, and scheduling. Moreover, flexibility, agility, and a network-like supply chain support climate change risk management. More often than being evaluated as a separate entity, climate change risks are assessed and managed as part of traditional supply chain risk management. Climate change risk management is still at the early stages, with companies having either not yet or only recently started the work. The conceptual framework suggests a three-step model of risk identification, assessment, and adaptation for climate change risks.Description
Thesis advisor
Kauppi, KatriKeywords
climate change, supply chain risk management, risk management framework, fashion and apparel