Stability can no longer be taken for granted

In the summer of 2024, a storm flooded the Novelis aluminum plant in Sierre, Valais. The loss of this single supplier forced Porsche to issue an ad hoc announcement to the stock exchange. The company lowered its annual forecast from 40–42 to 39–40 billion euros.ⁱ Richard Baldwin of IMD Lausanne commented matter-of-factly: “Porsche apparently did not consider diversifying its supply chains.”ⁱⁱ

A second example: The periods of low water on the Rhine, most recently severe in the summers of 2018 and 2022, forced Swiss industrial companies to make massive cutbacks. At times, ships sailed with only a third of their usual cargo or were grounded entirely.ⁱⁱⁱ For an inland economy that relies heavily on the Rhine as a transport corridor, a dry summer poses a risk to production.ⁱᵛ

Studies show that climate-related supply chain disruptions could result in a loss of up to 1.5 percent of GDP per decade by 2050 if no action is taken.ᵛ Already today, 67% of German transportation and logistics companies are feeling the concrete effects of climate change on their operations.ᵛⁱ The same applies to Switzerland, an export-dependent economy.

In addition, geopolitical instability, sanctions regimes, and customs risks can cause procurement markets to collapse overnight. Climate risks and geopolitical risks do not operate in isolation; they reinforce one another.

Resilience is no longer a luxury. It is essential for survival. Those who take a structured approach gain a real competitive advantage. Those who wait risk losing their ability to act.

What Business Resilience Means

Resilience refers to an organization’s ability to absorb external disruptions, adapt while continuing to operate, and emerge from crises stronger than before. Three key capabilities characterize a resilient company:ᵛⁱⁱ

• Absorptive resilience: The company withstands disruptions and mitigates their impact, for example through safety stock, redundant supplier structures, or technical redundancies.
• Adaptive resilience: The company reorganizes itself while continuing to operate. It switches to alternatives, activates backup suppliers, and flexibly redirects processes.
• Restorative resilience: After a major disruption, the company efficiently restores its original state when absorptive and adaptive measures are insufficient.

Resilience differs from crisis management and business continuity in its proactive approach: it establishes structures before a crisis occurs. Crisis management and business continuity effectively complement resilience, but have a broader scope.

Where companies should start

Resilience does not result from a single set of measures. It grows out of the interplay of structural changes at three levels.

Strategic level

• Systematically incorporate climate-related risks into your strategy. Extreme weather is changing the fundamental conditions of entire business models.
• Identify where your greatest concentration risks lie in procurement. Sanctions or geopolitical shifts can shut down markets overnight.
• Establish early-warning systems and regularly challenge strategic assumptions using rigorous “what-if” analysis.

Operational level

• Diversify your suppliers and sourcing regions. Develop local alternatives.
• Ensure transparency regarding Tier 1 suppliers and the broader supply chain. Climate risk analyses are key to this effort.
• Reduce your reliance on individual raw materials and energy sources. This reduces your vulnerability to price shocks and supply disruptions.
• Strengthen your IT infrastructure, plan for various scenarios, and develop flexible pricing strategies to counter volatility and cyberattacks.

Governance and Reporting

• Ensure that responsibility for resilience is assigned to the board of directors and executive management, with clear responsibilities and measurable goals.
• Do not treat due diligence, transparency, and reporting obligations (VSoTr and Art. 964a et seq. of the Swiss Code of Obligations) as a mere compliance exercise. Develop ESG data into a genuine management tool.
• Resilience is also a matter of credibility. Customers, employees, and investors expect it. That is why sustainability communication and stakeholder engagement are essential components.

How ecos supports you

We help Swiss companies identify risks, set priorities, and implement measures. Our focus is not on compliance, but on the strategic question: What capabilities does your company need to remain competitive in the long term in an increasingly uncertain environment?

Depending on the situation, we start from different entry points:

• Resilience Analysis: We analyze physical and transitional climate risks (in accordance with the TCFD) as well as supply chain and supplier risks related to biodiversity, water, and social issues.
• Strategy Development: We develop integrated sustainability and resilience strategies that include specific actions and goals.
• Operational adjustments: We support the implementation process, for example in the areas of energy transition, product innovation, or site adaptation.
• Organizational integration: We establish governance structures and ESG data management systems.

Would you like to know how resilient your business is today? Contact us.

Sources: ⁱ ntv.de (2024). Porsche muss seine Jahresprognose wegen Lieferengpässen bei Aluminiumlegierungen senken. https://www.n-tv.de/wirtschaft/Porsche-muss-seine-Jahresprognose-wegen-Lieferengpaessen-bei-Aluminiumlegierungen-senken-article25017494.html · SRF News (2024). Stillstand bei Zulieferer: Walliser Hochwasser wirkt sich auf Autohersteller Porsche aus. https://www.srf.ch/news/dialog/stillstand-bei-zulieferer-walliser-hochwasser-wirkt-sich-auf-autohersteller-porsche-aus · ⁱⁱⁱ Handelszeitung (2022). Wie ein Ausfall der Schifffahrt auf dem Rhein die Schweizer Wirtschaft trifft.      https://www.handelszeitung.ch/konjunktur/wie-ein-ausfall-der-schifffahrt-auf-dem-rhein-die-schweizer-wirtschaft-trifft-523328 · ⁱᵛ DW (08.08.2022). Niedrigwasser am Rhein schadet Wirtschaft.  https://amp.dw.com/de/trockenheit-niedrigwasser-am-rhein-schadet-wirtschaft/a-62528630 · ᵛ Sun, Y. et al. (2024). Global supply chains amplify economic costs of futre extreme heat rist. Nature, 627-300. https://doi.org/10.1038/s41586-024-07147-z · ᵛⁱ BVL – Bundesvereinigung Logistik (2024). Studie «Klimarisiken und Folgeschäden des Klimawandels 2024». https://www.bvl.de/presse/meldungen/studie-klimarisiken-und-folgeschaeden-des-klimawandels-2024 · ᵛⁱⁱ Biringer, B. E., Matalucci, R. V. & O'Connor, S. L. (2013).   Security Risk Assessment and Management: A Professional Practice Guide for Protecting Buildings and Infrastructures. Wiley-EEE Press.