Climate Action

6 ways technology is breaking down barriers in climate adaptation for global value chains

Climate risks are increasingly playing out in reality worldwide

Climate risks are increasingly playing out in reality worldwide Image: Wes Warren on Unsplash

Sonia Kastner
Chief Executive Officer, Pano AI
Lucas Bettarel
Project Fellow, Tech for Climate Adaptation, World Economic Forum
Ruth McLachlin
Lead, Climate Technologies, World Economic Forum
This article is part of: World Economic Forum Annual Meeting
  • Extreme weather events, resource limitations, and shifting environmental patterns are increasingly challenging the resilience of global value chains.
  • Innovations like Earth Observation, Internet of Things and drones, combined with AI, can be made more accessible, scalable and effective through collaboration between private and public stakeholders.
  • Technology helps individual organizations adapt and fosters collective action across value chains, unlocking shared benefits and positive impacts for communities and ecosystems.

Climate change is an undeniable force reshaping our world. Its effects are rippling across economies and ecosystems. Value chains — complex systems connecting suppliers, producers and consumers — face unprecedented disruptions from extreme weather, shifting agricultural patterns and resource scarcity.

Organizations are already struggling to address climate risks impacting their own assets and employees, but climate risks also lead to financial losses by disrupting upstream or downstream supply chains. As extreme weather events may exceed 560 per year – well over one per day – by 2030, companies could see their profits plunge by between 5% and 25% annually from 2050 if current trends persist. Technology is stepping up as a game-changer, however, offering innovative solutions to address these challenges in value chains facing climate risks to natural resources (like agriculture), assets (like energy infrastructure) and operations (like in manufacturing supply chains).

1. Predicting climate and weather for agriculture

Artificial intelligence (AI) is revolutionizing climate adaptation by transforming how farmers predict and prepare for climate risks. AI-driven predictive models analyze vast datasets from Earth Observation, weather stations and historical trends to forecast risks, such as droughts and floods, identify vulnerabilities and simulate potential response scenarios.

For instance, ClimateAI's platform forecasts localized temperature and precipitation shifts to help farmers optimize planting schedules and resource allocation and avoid potential yield loss. By aligning supply chain schedules, processors and retailers also benefit from predictable crop availability, improving supply chain efficiency and reducing waste.

Why now?

With climate variability escalating, collaborative action across the food value chain is essential to unlock the potential of predictive models. Data sharing among satellite providers, governments and cooperatives, combined with local stakeholder insights, ensures these tools deliver actionable intelligence, enhancing resilience and minimizing disruptions throughout the entire value chain.

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    2. Optimizing farming productivity and resources

    Precision farming harnesses advanced technologies, like IoT, AI, drones, and Earth Observation, to optimize agricultural productivity, while reducing resource use. IoT sensors monitor soil moisture, temperature and crop health, while aerial drones and satellite imagery provide a broader perspective on field conditions. These tools allow farmers to adjust inputs, such as water, fertilizer and pesticides, with pinpoint accuracy, reducing waste and protecting ecosystems.

    OCP Group's Tourba platform in Morocco, for example, combines expert advice with IoT and satellite data to optimize irrigation and fertilizer use, while monitoring soil carbon sequestration. This approach has improved yields and minimizes environmental impacts, and it benefits input suppliers, distributors and food processors by ensuring stable production levels and cost efficiencies.

    Why now?

    As resource scarcity intensifies, precision farming offers a solution for stakeholders across the agricultural value chain to collectively build more efficient, resilient and sustainable food systems.

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    3. Avoiding climate-led supply chain disruptions

    Digital supply chain platforms are transforming industrial operations by integrating AI, IoT and advanced analytics to optimize logistics and material tracking, mitigate risks and ensure operational continuity. These platforms analyze real-time weather and demand data, predict disruptions and adjust sourcing and routing in response to climate risks, like hurricanes or storms. Successful implementation requires collaboration between manufacturers, logistics providers and data platforms to share insights and align operations.

    IBM Watson’s Supply Chain Platform, for example, helps manufacturers adapt to climate disruptions by using real-time data and AI to adjust supply routes. CEVA Logistics leveraged this technology to accelerate the exchange of data all along its supply chain, ensuring zero downtime during peak demand and reducing delays caused by extreme weather events.

    Why now?

    As climate-related disruptions intensify, industrial stakeholders must collaborate all along the supply chain to align efforts, share real-time data and strengthen collective resilience.

    4. Detecting climate threats before they impact infrastructure

    Early warning systems combine Earth Observation, IoT sensors and AI to detect and monitor environmental threats, like storms, wildfires and floods. These systems provide real-time alerts, enabling coordinated action to take preventive measures and mitigate damages to infrastructure. Effective implementation requires collaboration among infrastructure operators, governments and emergency response teams.

    For instance, Pano AI's wildfire detection system leverages IoT sensors and satellite data to rapidly alert emergency response teams. It protects threatened communities and infrastructure operators, preventing millions of dollars in damage and saving lives.

    Why now?

    As extreme weather events grow more frequent and severe, early warning systems ensure resilience across value chains, reducing response times and resulting losses for infrastructure operators, local communities and interconnected industries.

    5. Protecting energy systems when impacts hit

    Smart protection systems deploy IoT sensors and automated technologies to shield energy infrastructure from climate-induced disasters, like floods. These systems rely on real-time data and environmental monitoring to trigger defences, such as flood barriers and automated shutdowns, minimizing damage. Collaboration between local governments, energy providers and infrastructure operators is key to ensuring seamless implementation.

    FloodBreak’s automated flood barriers at Cummins’ Engine Plant in Indiana activate without human intervention to prevent flooding and ensure uninterrupted operations during extreme weather. The benefits extend beyond energy providers to the communities and businesses reliant on uninterrupted power.

    Why now?

    As climate events grow more frequent and severe, smart protection systems provide critical, automated solutions to protect assets, reduce downtime and maintain operational continuity across global value chains.

    6. Resuming industrial operations swiftly after extreme weather events

    Dynamic disaster recovery leverages drones, Earth Observation and AI to accelerate response times and minimize the impact of extreme events. Drones provide immediate aerial imagery, enabling precise damage assessments, while Earth Observation satellites offer a broader view of affected areas to support large-scale planning. AI integrates these data streams to prioritize actions, optimize logistics and restore supply chain operations more efficiently.

    During Germany’s 2021 floods, drones helped automotive companies rapidly assess damage and resume operations, preventing further disruption in the downstream value chain. The same drones can also be used to deliver emergency supplies to isolated areas.

    Why now?

    Dynamic disaster recovery technologies offer scalable, fast-acting solutions to restore operations and mitigate losses in crisis scenarios, thanks to coordinated efforts among industrial stakeholders.

    The climate risks faced by agriculture, energy and manufacturing value chains are undeniable. Crops fail under unpredictable weather, infrastructure succumbs to disasters and supply chains grind to a halt, threatening economic stability and livelihoods. Yet, the benefits of acting collaboratively are equally clear: by sharing technologies and data, value chain stakeholders can enhance resilience, ensure operational continuity and create long-term value for all.

    As illustrated in a new white paper from the World Economic Forum and the Boston Consulting Group, Climate Adaptation: Unlocking Value Chains with the Power of Technology, technology-driven collaboration platforms are fostering collective adaptation by connecting stakeholders across value chains through data sharing, innovation and scalable adaptation solutions.

    The time to act is now. As businesses invest in these transformative solutions, they don’t just safeguard operations; they lead the charge towards a more resilient, equitable future.

    Are you ready to adapt? The solutions are here and the stakes have never been higher.

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