September 13, 2023 (MLN): The fashion supply chain, including four major countries; Pakistan, Cambodia, Bangladesh, and Vietnam could face a 22% shortfall in export earnings, amounting to a loss of $65 billion by 2030 due to the impacts of extreme heat and flooding, as per the latest research by Schroders and Cornell University.
Schroder in collaboration with Cornell University’s GLI analyzed the climate vulnerability of 32 production hubs and found that exposure to heat and flooding risk is widespread.
The four respective countries cumulatively contribute 18% of global apparel exports, employing a labor force of 10.6m workers across approximately 10,000 apparel and footwear factories.
“The major production centers; Dhaka, Phnom Penh, Karachi and Lahore, Ho Chi Minh and Hanoi are already confronting extreme heat and humidity,” the report stated.
These centers include local and foreign-owned manufacturers, who sell to a mix of fashion brands and retailers.
In the first study, Schroder used projections to analyze coastal and riverine flooding and wet-bulb globe temperature readings, as per which analysts projected heat and flooding.
The data gathered from the first study was further assessed to predict industry-level shortfalls for 2030 and 2050 by comparing a climate adaptive scenario with a high heat and flooding scenario.
The predictions indicated a loss of 1 new million jobs and $65bn in export earnings by 2030.
Looking ahead to 2035, research shows a potential 65-70% shortfall in export earnings and a reduction of 8-9m new jobs in the fashion industry due to the effects of extreme heat and flooding.
Going forward, the research cites the reference of Schroder’s second report which examined company-level climate risk, costs, and financing for adaptation.
“We found that workers and manufacturers for all six brands could face significant productivity impacts from extreme heat,” it further reads.
Moreover, the potential productivity headwind of heat stress and flood impacts in Ho Chi Minh and Cambodia’s Phnom Penh alone could equate to five percent of group operating profits.
This research highlights the urgent need for action with investors engaging with apparel companies and their stakeholders to ensure they start to measure and address the significant challenges of physical climate impacts on workers and business models.
Furthermore, apparel companies must look to partner with suppliers, and work with peers, worker organizations, and policymakers to design suitable adaptation strategies that consider the impact on workers.
Adaptation planning could have positive returns on investment for the industry and is a critical addition to mitigation efforts.
Multiple stakeholders; government, suppliers and their workers, brands and their investors will benefit from an increased focus on adaptation.
Copyright Mettis Link News
Posted on: 2023-09-13T15:47:59+05:00
