Purpose Climate change presents systemic risks to agricultural supply chains through increased drought frequency and severity. This study investigates how index-based agricultural insurance use can be measured to assess its contribution to supply chain sustainability performance and resilience. Design/methodology/approach Using a three-year embedded case study in the Australian agricultural sector, the paper analyses data from farmers, insurers, policymakers and downstream supply chain partners through semi-structured interviews, surveys and document analysis. The supply chain is the unit of analysis, with insurance adoption examined at the farm level. By positioning index-based insurance as a supply chain management tool with measurable performance impacts, the research advances sustainability measurement scholarship and addresses broader implications for food security and stakeholder well-being. Findings The findings reveal very few farms have taken up index-based insurance due to perceptions that these products are expensive and complex. Knowledge gaps also exist about these offerings. When products align better with supply chain needs, they create measurable value through improved financial stability, operational continuity and stakeholder coordination. Our results demonstrate how local decisions propagate through upstream and downstream relationships, shaping supply chain sustainability performance. Originality/value This research contributes to our understanding of supply chain sustainability performance by providing a multidimensional framework linking index-based agricultural insurance to a range of financial, operational, behavioural and supply chain outcomes. The paper integrates risk management and supply chain resilience theories to conceptualize insurance as a mechanism that can potentially mitigate climate risk exposure while building agricultural resilience.
Dodd et al. (Wed,) studied this question.