Supply chain managers to face more challenges on way to ESG compliance

Even companies with existing ESG policies will feel disruption from growing environmental regulations, it noted.

Extreme weather will also badly affect waiting times of bulk carriers, freighters and tankers, it marked. Weather events are the top logistics disruptor for supply chains, and that impact will increase as the ‘era of extremes’ persists into 2024, it noted.

Between 1972 and 2019, there was a 38-fold rise in environmental laws. There are more on the way as countries rush to meet looming net zero emissions goals and protect increasingly scarce natural resources.

Pending mandates tackle deforestation, packaging and chemicals use.

Litigation over per- and polyfluoroalkyl substances (PFAS) has been increasing year-over-year and will continue to grow. Production stoppages and litigation due to environmental violations are particularly strong in the United States, where nearly half of such incidents occurred last year.

Everstream Analytics recommends use of digital supply chain risk management tools to simplify both monitoring and compliance. Digital platforms can incorporate compliance risk into a company’s overall risk management strategy, reflecting the level of importance to operations and alerting managers to potential disruption, the report said.

The Panama Canal is experiencing its worst drought since records began in 1950, and the late December dry season means improvement isn’t likely in the first four to five months of 2024. As a result, draft height restrictions and daily vessel transit limits are growing.

Winter storms will also worsen delays and cancellations. Global ocean temperatures began this year at record highs, and, combined with a rising trend in disruptive winter weather (snow, ice, wind), this elevates the risk of more impactful storms.

Changes in precipitation distribution patterns will also create increased drought and flooding. The wide range of extremes (tails of the distribution) are expected to continue in 2024, the report cautions.

Fibre2Fashion News Desk (DS)