Climate & Environment
Supply Chain Risk
Definition
Supply chain risk is the exposure of an organisation to adverse events and conditions arising anywhere in its sourcing network: operational disruption (natural disasters, geopolitics, pandemics, supplier failure), compliance and legal risk (due diligence violations, forced labour import bans), reputational risk (exposés of abuses in lower tiers), and sustainability risk (deforestation, emissions, water stress in sourcing regions). Mapping beyond tier one is the acknowledged weak point — most companies cannot name their tier-three suppliers.
References
Source imported for editorial provenance.
This reference provides supporting context for how “Supply Chain Risk” is defined and used.
Overview
How it is used
The concept structures risk registers, supplier mapping investments, business continuity planning, and ESG risk assessment in procurement and investment.
Why it matters
A company is its supply chain; risks it cannot see are risks it owns anyway.