Risk to Resilience in the Pet Industry: Part III From Awareness to Action: Building Resilience Into Your Business

| Article by Hannah Hintz, Sr. Sustainability Analyst, PSC, Bard MBA in Sustainable Business, GARP SCR (Sustainability & Climate Risk) Certificate Holder |

Most pet companies already know climate risk is real. Fewer have actually done anything about it.

Climate and sustainability risk is a key factor in sourcing decisions, supplier conversations, capital planning and for some, regulatory filings. The question now moves to what to do about these risks.

In Part I of this series, we covered covered  why the pet industry is particularly exposed to climate risk. In Part II, we introduced a framework for sizing that risk through exposure, vulnerability, and impact. Now, in Part III, we focus on turning that understanding into practical action that builds  resilience through value chain engagement.

In this article you’ll learn:

• Why supplier engagement is one of the highest-leverage actions pet companies can take
• How natural systems influence supply chain resilience
• Questions to ask suppliers to better understand climate risk
• Ways to incorporate resilience into procurement, product development, and governance

Most Companies Know the Risk. Few Have a Plan. 

The 2026 BSR and GlobeScan State of Sustainable Business survey of 124 senior sustainability professionals at large global companies offers a useful benchmark for where business stands on climate action right now.

Nearly 60% of companies surveyed had integrated physical climate risk into their enterprise risk management processes. While this is real progress, only 30% had developed climate adaptation plans for their own operations. Moreover, just 15% had done so for their supply chain.

Many companies may understand the risks but haven’t developed a plan to address them. The same survey found that companies are narrowing their focus to their own operations and closest suppliers, with less attention to the broader value chain, which is actually where most supply chain risk for the pet industry sits.
For the pet industry specifically, the gap between identification and action carries real cost. 
Ingredient supply disruptions, retailer sustainability requirements, and climate-related cost volatility are arriving faster than most companies have built the capacity to respond. Building that capacity starts with knowing where to focus.

Supplier Engagement: The Highest-Leverage Starting Point

The greatest concentration of climate-related risk most likely sits outside your own operations. It lives in the farms, fisheries, processing facilities, and logistics networks that make your products possible. Engaging suppliers on climate risk is the single highest-leverage action most pet companies can take.

Talking with suppliers gives you earlier visibility into risk, strengthens relationships, and makes contingency planning more accessible. 

What You Cannot See Can Still Impact You

Most pet companies have some visibility into their Tier 1 suppliers: the co-manufacturers, ingredient processors, and packaging suppliers they work with directly. Fewer have meaningful insight beyond that, where raw ingredients originate, where water comes from, and where the climate risks often emerge first.

A drought affecting a key agricultural watershed does not announce itself at your supplier’s door. It shows up first at the farm or fishing ground, often seasons before it reaches your costs or availability. Companies with relationships that reach further upstream see disruption coming earlier and have more time to respond.

5 questions to Ask Your Suppliers

Meaningful supplier engagement on climate risk does not require a formal program. It can start with just a few questions:

• What climate-related disruptions have you experienced in the last three to five years, and how did they affect your operations or costs?
• Where are your raw material sources located, and are any of those regions experiencing water stress, extreme heat, or weather volatility?
• Do you have contingency plans for supply disruptions? Have they been tested?
• Are you tracking your environmental footprint, and do you have visibility into the natural systems your operations depend on?
• What support could your company use to answer these questions, to better understand risk?

These questions do two things at once: they help you understand your risk, and they tell your supplier that resilience matters to your sourcing decisions.  That alone can influence how suppliers prepare for future risks.

Using Procurement as a Resilience Signal

Measuring risk exposure and vulnerability gives you a picture of where you stand today. Scenario planning extends that picture forward, asking how different Procurement decisions are among the most powerful sustainability tools available. Companies that factor climate resilience into sourcing criteria, that give weight to suppliers with diversified sourcing geographies or demonstrated land stewardship practices, are shaping their supply chain’s risk profile with every decision they make.

You don’t need to immediately switch suppliers or demand the perfect data overnight. It means building resilience criteria into supplier evaluation alongside the traditional factors of price, quality, and reliability. Over time, resilience becomes its own form of reliability.

Protecting the Natural Systems Your Supply Chain Depends On

Most discussions of supply chain resilience focus on the companies in the chain. Less often discussed are the natural systems those companies depend on. Forests, wetlands, watersheds, and soils are not just environmental assets. They are the infrastructure that keeps agricultural and protein supply chains functioning. When those systems are degraded, risk increases. When they are healthy and intact, they provide real and measurable protection.

• Forests and wildfire risk: Well-managed forests help moderate wildfire severity by maintaining moisture in the landscape and reducing fuel loads. Companies sourcing from agricultural regions adjacent to forestland have a direct business interest in the health of that surrounding landscape.
• Wetlands and flood risk: Coastal wetlands and riparian buffers absorb storm surge and slow floodwaters, often at a fraction of the cost of engineered flood barriers. For manufacturing facilities or supplier operations near coastlines or rivers, the presence of functioning wetlands is a material risk consideration.
• Watersheds and water supply: Healthy, protected watersheds stabilize water supply, reduce treatment costs, and buffer against drought. For proteins that depend on consistent water availability, the condition of the upstream watershed is an environmental and a supply chain issue.
• Soil health and ingredient stability: Well-managed soils retain more water, resist erosion, and support more stable crop yields. Pet companies sourcing grain, vegetable, or plant-based ingredients have a long-term stake in soil health even when purchasing through intermediaries.

Few pet companies own the land adjacent to their supply chains. But sourcing decisions, procurement criteria, and supplier relationships all create leverage. Companies can ask about land management practices, prioritize suppliers with commitments to watershed or ecosystem health, and recognize that upstream investment in natural systems reduces downstream risk.

This is not altruism. It is a different category of risk management, one that addresses root causes rather than symptoms.

Embedding Risk Into Business Decisions

Understanding risk exposure and engaging suppliers are starting points. The next step is making sure that understanding shows up in how your business makes everyday decisions. This is where risk awareness becomes resilience.

Product and Portfolio Decisions

Every formulation decision is also a risk decision. Tactical sources that prioritize low cost and low complexity in the short term might carry more risk than strategic sources that establish longer-term partnerships. For example, an ingredient that is currently cost-effective but sourced from a single climate-vulnerable region carries a different risk profile than one with diversified sourcing across multiple geographies. Considering source risk during product development makes your portfolio more resilient over time.
Packaging decisions carry transition risk too. Materials with long lead times, limited supplier bases, or high energy intensity in production face increasing cost pressure as climate policy tightens. Companies that factor these considerations into product development now are ahead of regulatory and market shifts that are already underway.

Capital and Operational Decisions

When companies invest in new manufacturing, new markets, or make long-term supply agreements, they are making bets about future conditions. A facility built in a region with rising flood risk, or a multi-year supply agreement with a single-source ingredient supplier in a drought-prone watershed, is a bet that current conditions will hold. Stress-testing those assumptions against climate scenarios before committing capital is one of the highest-value applications of risk awareness.

Governance: Who Owns the Risk?

The BSR/GlobeScan survey found that the greatest barriers to sustainability progress are internal: organizational alignment, governance, and capital allocation. Companies also reported lower engagement between sustainability functions and core business units in 2026 than a decade earlier.

This points to a question that matters for pet companies of all sizes: who in your organization owns climate risk? If it sits only with a sustainability team or a single champion, it will not move at the speed needed. Resilience requires that risk awareness is shared across procurement, operations, finance, and product development, and that climate risk should influence your business decisions, not just when reports are written.

The Regulatory Horizon

Climate-related disclosure and risk management are becoming regulatory expectations in key markets.

The EU’s Corporate Sustainability Reporting Directive (CSRD) requires large companies operating in Europe to disclose detailed information on climate risks, including physical and transition risks, supply chain impacts, and resilience strategies. California’s SB-261 requires companies with significant California revenue to publicly disclose climate-related financial risks. These requirements are beginning to reach companies of all sizes through their supply chains and retail relationships.

For most pet companies, the most immediate pathway is through retail partners and investors rather than direct regulatory obligation. Major retailers are building sustainability requirements into procurement standards. Lenders are beginning to price climate risk into financing decisions. Companies that cannot answer basic questions about their risk profile will face friction in these relationships before direct regulatory requirements reach them.

The underlying questions are consistent across all of these stakeholders:

• What risks has your company identified, and how material are they to your business?
• What are you doing to manage or reduce those risks?
• How have climate considerations influenced your strategy and capital allocation?

Companies that have done the underlying thinking, even informally, are better positioned to answer these questions credibly when they are asked.

The Takeaway: What This Series Has Covered

This series has been designed for companies at any stage of their sustainability journey, from those just beginning to think about climate risk to those actively building response plans. Here’s what each part covered: 

• Part I established that climate and sustainability risk is already shaping cost, supply stability, regulatory exposure, and long-term growth in the pet industry.
• Part II introduced a practical framework for sizing those risks through exposure, vulnerability, and impact, with scenario planning and the TCFD risk management logic as tools for structured thinking.
• Part III has focused on where to direct action: supplier engagement as the highest-leverage starting point, the role of natural systems in supply chain resilience, and how to embed risk awareness into everyday product, capital, and governance decisions.

Across all three parts, the core message has been consistent. Resilience is not built by waiting for disruption and reacting. It is built by developing the awareness, the relationships, and the decision-making practices that allow a company to absorb and adapt when disruption arrives.

Ready to take the next step?

The Pet Sustainability Coalition (PSC)  is proud to support sustainability leaders within the pet industry and welcomes all others to join us. Our coalition connects you with peers doing this work, provides industry benchmarks through our State of Sustainability report, and offers resources to help you build a more resilient business.

Get the tools, benchmarks, and community to build a more resilient business.

About This Series

Risk to Resilience in the Pet Industry is a three-part series from the Pet Sustainability Coalition exploring how pet companies can understand and act on climate and sustainability risk. The series is designed to be educational and companies at any stage of their sustainability journey.

Questions or want to join the conversation? Reach us at info@petsustainability.org