In recent years, the fashion industry has faced mounting pressure to confront its environmental impact, particularly in the context of climate change. With the global temperature rising, brands can no longer afford to view climate risks as a distant threat or a mere marketing opportunity. The consequences of inaction are becoming increasingly evident, impacting not only the environment but also the industry’s financial stability and the livelihoods of countless workers.
Vidhura Ralapanawe, head of sustainability and innovation at Epic Group, highlights a harsh reality: “Even for me, knowing the science, I didn’t expect these kinds of massive heatwaves so fast… that really floored me.” This sentiment captures the alarm felt across the industry as extreme weather events increasingly disrupt manufacturing and supply chains.
An alarming statistic underscored in recent reports indicates that climate-related disasters have resulted in nearly $4 trillion of economic damage globally since 2000. The fashion industry, heavily reliant on stable supply chains in vulnerable regions, stands to lose potentially billions from escalating climate impacts. For instance, Bangladesh, Thailand, and Vietnam, significant manufacturing hubs, could see their export earnings decline by more than 20% by the end of the decade, according to an analysis by Cornell University.
Major fashion players like Kering and LVMH are beginning to recognize the threats posed by climate change and have noted in regulatory filings how rising temperatures could compromise the availability of raw materials, such as cotton and leather. Zara’s parent company, Inditex, reported that extreme weather events impacted their retail operations nine times in 2023 alone. However, despite these warnings, many executives still treat climate risk as a long-term issue rather than an urgent crisis needing immediate attention.
The fashion industry has attempted to navigate these challenges by bolstering contingency plans, exploring more sustainable sourcing practices, and assessing their total environmental impact. For example, H&M has established protocols to relocate production away from high-risk areas when conditions become untenable. Nike has also implemented measures to mitigate heat stress in its supply chains. However, many brands continue to cling to outdated mindsets, treating climate change as a challenge that can be managed over the long term rather than a systemic risk that demands immediate, proactive measures.
The challenge lies, in part, in the industry’s complex supply chain, where various participants may prioritize short-term profits over long-term sustainability. Many brands have yet to grasp the true costs of inaction. “Acting has a cost, but inaction has a higher cost,” says Anna Raffaelli, sector lead for fashion and apparel at The Carbon Trust. Ignoring climate risks can lead to catastrophic failures that impact not just the environment but also the bottom line, given the economic penalties associated with climate-related disasters.
In response to shifting public sentiment and regulatory scrutiny, incoming European regulations will soon demand greater transparency regarding environmental impacts and climate risk management strategies. This shift indicates a recognition that brands must not only mitigate their own impacts but also consider their responsibilities within the broader context of their supply chains. The dialogue around climate risk is evolving, yet it remains in its infancy. Many brands are still trying to determine what effective risk management looks like in practical terms.
As experts point out, the true extent of climate risks is difficult to predict. With varied scenarios and deeply entrenched, complex supply chains, many fashion brands might hesitate to comprehensively assess their risks. This inaction only exacerbates the problem. Jason Judd of Cornell University’s Global Labour Institute has noted, “If you get a leading global retailer on the phone and press them on the level and quality and confidence in the climate risk analysis they’ve done, I think it’s not very high. That’s unnerving.”
Moving forward, companies that proactively engage in addressing climate risks will likely emerge as leaders in an increasingly competitive landscape. Those that maintain a reactive approach, however, may find themselves left behind as climate impacts become inevitable and consuming trends shift.
A profound transformation is necessary across the fashion industry. Business leaders must shift their focus from merely complying with regulations or riding the wave of consumer demand for sustainability to genuinely embedding sustainable practices into their operations. This might mean investing in innovative solutions, like renewable energy or sustainable sourcing technologies, rather than relying solely on traditional models that prioritize immediate financial returns.
Moreover, brands must equip themselves with the right tools to track and manage their environmental footprints effectively. Initiatives led by organizations like The Carbon Trust are paving the way for a more comprehensive understanding of climate risks, equipping businesses with necessary tools and insights. Such approaches provide the potential for creating a more resilient industry that is better equipped to handle future climate-related challenges.
In conclusion, the fashion industry stands at a pivotal juncture. The time for brands to reassess their relationship with climate change is now. A collective commitment to sustainable practices is not just about those in luxury markets. It is about the future of fashion and the wider societal implications it holds.
