Just 11% of organisations consider themselves fully or very prepared to confront water-related supply chain risks, according to research published by the Association of Chartered Certified Accountants (ACCA).
The study, titled Weather proofing your supply chain, was released ahead of the United Nations Climate Change Conference (COP 31).
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It indicates that whilst severe weather is exerting intensifying pressure on supply networks, corporate responses remain slow.
Drawing on a survey of approximately 500 ACCA members, the report highlights how climate, water, resource, and human-rights concerns are becoming central to commercial decisions.
Extreme weather increasingly threatens manufacturing lines, transport routes, and critical resources.
The findings show that vulnerabilities originating in local weather, resource availability, vendor operations, or labour conditions regularly filter into higher operational costs, strained cash flows, and disrupted continuity.
Over the coming five to ten years, respondents expect multiple sustainability risks to have a severe financial impact on supply chains.
Material and resource scarcity ranked highest at 43%, followed by physical climate threats at 38%, water-related risks at 36%, and transition challenges at 34%.
When considering how to bolster preparedness for water-related risks, 47% of respondents prioritised strengthening business continuity and disruption planning.
A further 40% favoured funding physical and operational resilience, while 39% pointed to improved evaluations of supplier exposure to water risks.
ACCA Sustainability head Emmeline Skelton said: “Technology is giving organisations new ways to anticipate disruption, from weather data and sensors to AI-based early-warning systems.
“But better information only creates value when it leads to better decisions.
“For finance professionals, the opportunity is to turn these signals into informed business decisions understanding the financial implications, demonstrating the value of investing in resilience and helping organisations act before disruption occurs.”
To encourage earlier intervention, the ACCA report outlines five steps for businesses.
It advises firms to monitor forecasts and early-warning alerts, pinpoint where operational bottlenecks could emerge, and examine supply chains beyond self-reported vendor disclosures.
The report also recommends quantifying the financial cost of potential disruption, balancing the expense of proactive resilience against potential losses from halted manufacturing, elevated input prices, or broken supply.
Finally, it urges organisations to integrate sustainability and climate data directly into routine business governance, capital allocation, sourcing policies, and working capital management.
