Why Procurement Leaders Must Address Climate Risks
Proxima's Global Sourcing Risk Index highlights how the Philippines, Indonesia, India, Colombia and Mexico have been identified as most vulnerable to extreme weather and climate sourcing risks.
The report was developed by leading global procurement and supply chain consultancy, Proxima, in partnership with Oxford Economics.
The index ranks the locations which have the most risk of supply chain disruption from climate and weather events.
To find these results, the report drew on global data and sector-specific sourcing trends, which shows there is an urgent need for Chief Procurement Officers to understand and, where necessary, reassess location decisions and resilience planning as climate volatility shapes international trade.
The research defined why the five countries are the most exposed to sourcing disruption from climate hazards:
Philippines: Highly exposed to super typhoons and flooding, threatening food and beverage exports, especially coconut oil. Services like BPO also face growing risks, including power outages and transport disruption.
Indonesia: The world's largest exporter of palm oil (over 50% of global supply) and an expanding manufacturing hub for textiles, footwear and consumer goods. Key industrial zones are highly vulnerable to flood and drought cycles.
India: 27 of its 29 states experience regular exposure to cyclones, floods, droughts, earthquakes and landslides. Major impacts include crop destruction (notably rice and sugarcane), supply chain disruption and regionalised risk across service sectors such as BPO.
Colombia: Located on the Andean seismic belt, Colombia faces frequent earthquakes, landslides and seasonal flooding. Major export sectors at risk include agriculture (coffee, bananas and flowers) and mining, due to chronic infrastructure limitations and weather volatility.
Mexico: Confronts hurricanes, inland flooding and drought, but balances these challenges through strong infrastructure and robust adaptive capacity. Its resilience is increasingly important for manufacturing and nearshoring strategies.
Urgent action required for supply chain resilience
Simon Geale, EVP at Proxima, says: "Our report underscores the reality that weather and climate events are inextricably linked to the fabric of global trade. For sourcing professionals, this is not a distant risk. It is a present-day challenge that requires urgent, proactive action.
"Businesses must look beyond traditional risk matrices and factor in both immediate exposure and each market's true adaptive capacity.
"Diversifying supply sources across different geographies, holding strategic inventory and embedding data-led forecasting tools are no longer optional - they are essential for long-term resilience.
"The need for robust scenario planning has never been clearer. Our latest index is designed to help procurement leaders quantify, prioritise and address climate risks in their supply chains, so they can build both commercial and operational advantages."
Major economies not immune to climate disruption
Several major economies face significant climate risk despite their economic strength. The US ranks seventh in climate vulnerability, while Australia and China hold the 9th and 10th positions respectively. Their vast geographical footprints contribute substantially to this exposure and any climate-related disruptions within these nations can ripple through global markets given their pivotal roles in international supply networks.
Whilst European supply chains generally operate within more climatically stable regions, recent extreme weather events and evolving regulatory frameworks underscore the importance of building redundancy into sourcing strategies and strengthening operational resilience.
The food and beverage, construction and retail sectors face particularly acute climate risks.
In response, many industries are shifting away from lean "just-in-time" models towards more robust "just-in-case" approaches that emphasise supply chain diversification and resilience as primary strategic objectives.
