<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=4361794&fmt=gif" />
Tabitha Whiting
Tabitha WhitingContent Marketing
A heatwave in India and supply chain issues in the construction industry – how are they connected?
A heatwave in India and supply chain issues in the construction industry – how are they connected?
South Asia has been in the midst of a heatwave for months. Not only does this have deadly social and environmental consequences, it’s also causing major issues for businesses across the world due to today’s global supply chains.July 19, 2022

From months of heatwave to severe flooding, South Asia in 2022 has been living proof that climate change is causing increased likelihood of extreme weather events.

And that’s not to mention extreme flooding in America earlier in the year, or the heatwaves happening right now in the UK and across Europe, with unprecedented temperatures and forest fires across France, Portugal, Spain, and Greece.

We could go on.

It can be easy to ignore the headlines on climate impacts. That’s especially true in terms of responding as a business – it just doesn’t feel like it impacts our day-to-day work, if we aren’t living in the immediate area affected.

In reality that isn’t true. 

In today’s globalised economy, events like this heatwave have profound implications that ripple far beyond South Asia and cause supply chain issues for businesses across the world. 

And as these events become more and more common, supply chain disruptions will impact every industry and every business.

Air conditioning, power shortages, and wasted goods – what the heatwave means for India’s manufacturing industry

Let’s work through one example of the supply chain implications of this year’s prolonged heatwave in India: the impact of increased demand on energy on the manufacturing industry.

Step 1:

Due to the scorching heat, people have turned to air conditioning for comfort – even survival, in some cases. Air conditioning units are energy intensive, and energy demand has risen to an all-time high.

Subscribe to our monthly newsletter

Step 2: 

The increase in demand for energy has led to shortages, particularly in stocks of coal which became critically low early on in the heatwave. This meant that energy became very expensive in India, and that power outages became a regular occurrence.

Step 3:

Manufacturing businesses (amongst others, of course) rely heavily on energy, due to manufacturing machinery. India has a huge manufacturing industry, supplying parts to companies across the globe – in 2021, for instance, they exported machinery parts to a value of $1.06 billion to the UK, and $5.25 billion to the US.

Increased energy costs meant that some manufacturing businesses simply couldn’t afford to operate. And the power outages meant that machinery has been unable to be used for much of the working day over the period of the heatwave, which has spanned several months already. 

Sandeep Mall’s engineering factory in Delhi, for instance, experienced power cuts of up to 14 hours every day. Every time a power cut started, their machines were interrupted and rejected the products they were working on – meaning the factory was wasting a lot of time and materials, and were able to produce much less than usual.

Step 4:

The global supply of manufactured goods is reduced and prices increase. In turn, this leads to increased running costs and/or shortages of supply for those businesses which use goods from India – which then creates further run-on impacts for other businesses in the supply chain. Mall’s factory, for instance, supplies parts for the aeronautics, automobile, mining and construction industries.

What’s the lesson for businesses?

That’s just one example of the impact of the heatwave on the global economy. 

We could also talk about the shortage of wheat exports from India – adding to the lack of supply from Russia and Ukraine due to the war, and causing the global cost of wheat to increase to around $475 per tonne (compared to $260 in 2021).

But we won’t go into that now.

There are two key lessons to take from this.

1. Businesses need to adapt and innovate now to survive

As extreme weather events become more and more regular we’re going to see supply chain disruptions like those outlined in this article happening all the time – if this example wouldn’t affect you, another example will.

2. Businesses can be part of the solution

Businesses have huge influence in society and so they have a huge role to play in responding to climate change. 


By reducing your own carbon footprint, exploring ways to bring climate impact into your product and service, and contributing financially to rapid emissions reductions and carbon removal – including high-quality projects in India such as the Gold Standard certified Bagepalli CDM reforestation project working to reforest degraded agricultural land in the Chikkaballapur District of Karnataka.

Popular articles

Lune x Visa
Lune partners with Visa to help accelerate meaningful climate action

Lune will offer trusted, high-quality carbon projects to Visa’s global network of merchants, banks, and partners – working together with a goal to scale climate action.

Photo of a direct air capture plant, with mountains and blue sky in the background
How to suck all that carbon we’ve emitted back out of the atmosphere – a deep dive on Direct Air Capture

We’ve emitted billions of tonnes of carbon emissions and now (alongside drastically reducing those emissions) we need to get it out of the atmosphere. How do we do that? Well, Direct Air Capture is one solution – here’s everything you need to know about it.

Company emissions, 2022 report
Climate disclosure regulations are coming into effect across the world – here’s what you need to know

Legislation requiring companies to report on sustainability – their environmental impact and the risks and opportunities facing the business – is upcoming across the globe, from the EU Corporate Sustainability Reporting Directive to the US proposed SEC climate disclosure rule. 

Subscribe to our monthly newsletter – and get a free copy of our Complete Guide to Offsetting

Offsetting guide
Offsetting guide