The Impact of ENSO Shocks on Firm Performance: The Role of Supply Chain Resilience and Network Complexity in Energy Firms

Escalating climate volatility, particularly the El Niño/Southern Oscillation (ENSO), poses severe operational and financial risks to corporate sustainability in the energy sector. However, quantitative evidence regarding how macro-level climate shocks transmit to micro-level operational performance remains scarce. Integrating dynamic capability and social network theories, this study analyzes a panel of 103 Chinese listed energy firms (2005–2022) using System GMM, mediation, and moderation models. The results indicate that ENSO intensity significantly impairs performance; specifically, a 1 °C rise in sea surface temperature anomalies decreases firms’ return on assets (ROAs) by 0.142%. We identify supply chain resilience as a critical strategic mechanism for climate adaptation, where response capacity acts as the dominant mediating channel, while recovery capacity functions as an independent compensatory mechanism. Conversely, supply network complexity—across horizontal, vertical, and spatial dimensions—amplifies the negative impact of climate disruptions by hindering resource mobility. Heterogeneity analysis reveals that state-owned enterprises exhibit stronger institutional resilience, and firms in southern regions partially offset impacts through hydropower advantages. This study bridges climate science with operations management, offering strategic guidance for managers to configure resilient, sustainable supply chains capable of withstanding environmental turbulence.

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Publication Details

Journal
Sustainability
Published
2026-03-26
DOI
https://doi.org/10.3390/su18073261
Primary Topic
Supply Chain Resilience and Risk Management
Type
article
Field-Weighted Citation Impact
0.00
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article

The Impact of ENSO Shocks on Firm Performance: The Role of Supply Chain Resilience and Network Complexity in Energy Firms

Aixing Li, Ke Gong, Xueting Luo, Xiaomei Ding et al.
Sustainability
Supply Chain Resilience and Risk Management
article

The Impact of ENSO Shocks on Firm Performance: The Role of Supply Chain Resilience and Network Complexity in Energy Firms

Aixing Li, Ke Gong, Xueting Luo, Xiaomei Ding, Yuhang Yang
article en

Abstract

Escalating climate volatility, particularly the El Niño/Southern Oscillation (ENSO), poses severe operational and financial risks to corporate sustainability in the energy sector. However, quantitative evidence regarding how macro-level climate shocks transmit to micro-level operational performance remains scarce. Integrating dynamic capability and social network theories, this study analyzes a panel of 103 Chinese listed energy firms (2005–2022) using System GMM, mediation, and moderation models. The results indicate that ENSO intensity significantly impairs performance; specifically, a 1 °C rise in sea surface temperature anomalies decreases firms’ return on assets (ROAs) by 0.142%. We identify supply chain resilience as a critical strategic mechanism for climate adaptation, where response capacity acts as the dominant mediating channel, while recovery capacity functions as an independent compensatory mechanism. Conversely, supply network complexity—across horizontal, vertical, and spatial dimensions—amplifies the negative impact of climate disruptions by hindering resource mobility. Heterogeneity analysis reveals that state-owned enterprises exhibit stronger institutional resilience, and firms in southern regions partially offset impacts through hydropower advantages. This study bridges climate science with operations management, offering strategic guidance for managers to configure resilient, sustainable supply chains capable of withstanding environmental turbulence.

SustainabilityVol. 18(7)
Qiqihar University (CN), Chongqing Jiaotong University (CN), Wuyi University (CN)
Openalex Percentile: Top 5%
Supply Chain Resilience and Risk Management
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The Impact of ENSO Shocks on Firm Performance: The Role of Supply Chain Resilience and Network Complexity in Energy Firms — Aixing Li, Ke Gong, et al. · Sustainability (2026) | TGRS Research Map | TGRS