Supply Chain Risks Are Changing. Shouldn't Financing Change Too?

(MENAFN- ING)

Climate and weather-related shocks are a growing source of supply chain risk. In August, the Rhine River's water levels hit a record low since 1880, hindering trade flows across Europe. In 2024, Hurricane Helene affected global tech and medical supply chains by flooding key ultra-pure quartz production facilities in the US. The upcoming“very strong” El Niño could substantially disrupt temperature and precipitation patterns across the globe next year, putting, for example, food production and trade at risk.

These events underscore the need to build supply chain resilience. Extreme weather is now a more impactful part of the supply chain risk landscape alongside geopolitics and other risks.

Yet significant gaps remain. First, while the awareness of supply chain climate risks is rising, many companies have yet to acknowledge their financial materiality. Second, the uptake of financing solutions has not kept pace with supply chain resilience needs, despite trade finance supporting around 90% of global trade. This leaves financial institutions well positioned to expand financing solutions that support corporate supply chain resilience. Below is how they can do it.

Expanding banks' toolkit for supply chain resilience

1. Broaden the use of sustainable finance

Today, the most common way banks support supply chain resilience is through sustainable finance – in other words, sustainability-labelled debt. However, scaling up this market remains challenging because supply chain resilience is not a standalone category under widely used frameworks such as the International Capital Market Association's (ICMA's) Green Bond Principles and Green Loan Principles. This makes it harder for issuers to finance projects under a dedicated supply chain resilience theme. As a result, there is also limited data on the total volume of sustainable finance supporting supply chain resilience. The global green bond use-of-proceeds allocation data, for example, demonstrates this challenge.

Global green bond use-of-proceeds allocation, January-August 2026 Source: ING Research, BloombergNEF

">

But at the same time, this creates an opportunity. Supply chains are closely linked to many existing sustainable finance themes. Projects that strengthen supply chain resilience can often be financed under established categories such as climate adaptation (e.g. resilient infrastructure and information systems), sustainable water management (e.g. flood mitigation), circular economy, and so on. This requires banks to better understand which supply chain challenges matter most to each client and identify the sustainability solutions best suited to their needs.

2. Look beyond labelled sustainable debt

The opportunity to finance supply chain resilience extends well beyond traditional sustainable debt markets. Here are some examples:

Supply chain resilience finance
The traditional supply chain and trade finance solutions can be tailored to integrate resilience objectives. For example, guarantees can support cross-border trade in climate-resilient goods, while preferential financing terms can reward companies that actively manage supply chain risks. By incorporating supply chain risk assessments into financing programmes and linking working capital solutions to supplier resilience, these products can help companies better withstand disruptions and support long-term growth.
Climate and resilience tech finance
Banks can provide financing and advisory services to help scale and deploy technologies that strengthen supply chain resilience. Examples include water management technologies, regenerative agriculture, and indoor farming. These solutions can improve the upstream supply chains of industries such as food, beverage, and hospitality. As interest in resilience technologies grows, financial institutions are increasingly developing tailored financing solutions to support their adoption.

Blended finance
Some resilience technologies, projects, and markets may be too risky for commercial banks to finance on their own. Blended finance offers a compelling solution, as it combines private capital with support from multilateral development banks or other public institutions. This can reduce risk for lenders while helping companies access more affordable funding for resilience-related investments.

For banks, these solutions reflect a shift in mindset and strategy. Moving beyond financing individual transactions, banks now play an important role in helping build a resilient ecosystem of suppliers, infrastructure, and logistics networks.

Corporates have a part to play too

As banks work to expand their financing offerings to enhance supply chain resilience, companies would benefit from doing their part as well. My colleague Rico Luman has written about some best practices companies can adopt in their day-to-day operations. These include building up inventory of high-risk supply materials, diversifying suppliers and transport routes, and improving supply chain visibility. Financing solutions that link resilience to working capital, for example, can help companies strengthen these efforts.

Companies can also look beyond day-to-day operations and invest in longer-term resilience initiatives, such as climate-resilient materials, water management technologies, and other adaptation solutions. These investments can help create more resilient supply chains while opening up additional financing opportunities.

Treat climate risks as business risks – and financing opportunities

As climate risks become supply chain risks, resilience needs financing. The available toolkit for financing supply chain resilience offers more potential than what the market is consistently tapping today. This creates considerable opportunities for banks and companies to explore together.

MENAFN09102026000222011065ID1111784972