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Climate change. Extreme heat and floods could cost the fashion industry $65 billion

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In just four Asian countries, revenues from clothing exports may decline by $65 billion by the end of the decade, and up to 8.6 million jobs may disappear by 2050, according to a study conducted by Schroders and Cornell University. According to the authors of the analysis, the process of understanding the impact of climate change on the operation of enterprises is “in its infancy”.

The study by Schroders and Cornell University, published last Wednesday, focuses on four countries: BangladeshCambodia, Pakistan and Vietnam. As Reuters points out, they are responsible for 18 percent of global clothing exports, and 10.6 million workers are employed in clothing and footwear factories in their area.

The analysis shows that extreme heat and floods in 2025-2030 may reduce productivity and thus reduce the revenues from clothing exports of the mentioned countries by USD 65 billion (approx. PLN 282 billion – ed.). If the clothing industry doesn’t find solutions to help it deal with climate changeup to 8.6 million jobs may disappear by 2050.

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The clothing industry could lose billions

The changes could also affect the supply chains of six global fashion brands not mentioned by name in the research report cited by Reuters. For one brand, this could mean reducing annual operating profit by five percent. The authors of the study would like their findings to be a “wake-up call” to the clothing industry and investors “struggling with a lack of information on the degree of exposure of companies.”

– None of the suppliers and buyers we talked to paid much attention to these two issues (heat and flooding – ed.) – said Jason Judd, executive director of the Cornell Global Labor Institute. “The industry’s response to climate change mainly involves mitigation, emissions and recycling,” he added.

Climate change and “correct assessment”

According to Angus Bauer, head of sustainable investment research at Schroders, the process of understanding the impact of climate change on business operations is “in its infancy” because few companies disclose enough information and few investors “undertake proper assessment” of the situation. – There is very little data on this subject… Some (clothing) brands do not disclose the location of their suppliers’ factories – he emphasized.

SEE ALSO: The Earth is becoming less and less friendly to people. We have crossed six planetary boundaries

Main photo source: Shutterstock

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