Theme 02.Climate Urgency in Fashion: Addressing the Rising Tide in 2024
Welcome back to our series on "The State of Fashion 2024" by The Business of Fashion and McKinsey & Company. Today, we're delving into a critical and increasingly urgent theme: Climate Urgency. As the fashion industry grapples with its environmental impact, the year 2023 has served as a stark reminder of the immediate need for action. Let's explore the key insights from the report and understand the steps the fashion industry needs to take.
Key Insights
Fashion's Carbon Footprint: The industry is responsible for 3-8% of global greenhouse gas emissions.
Economic and Employment Risks: By 2030, extreme weather could jeopardize $65 billion in apparel exports and nearly one million jobs in key fashion economies.
Competing Challenges: Fashion executives are also wrestling with economic uncertainty, geopolitical tensions, and inflation.
The Stark Reality of Climate Change
The fashion industry is notably vulnerable to climate risks due to its global value chain. The increasing frequency and intensity of extreme weather events in 2023 have made the climate crisis more visible and immediate.
The Vulnerability of Fashion’s Supply Chain
The geographic footprint of fashion’s supply chains makes it particularly susceptible to climate volatility. In 2024, a mindset shift is crucial to view climate risk as an immediate challenge rather than a distant future issue.
Direct Impacts
Raw Material Production: Events like droughts and floods are affecting cotton production, a key raw material, in major exporting countries like India and Pakistan.
Manufacturing Risks: Flooding poses risks to manufacturing sites, particularly in countries like Vietnam and Bangladesh, impacting both production and worker safety.
The Economic Toll of Climate Change
Beyond the environmental and human tragedy, the economic impact of climate-related disasters is profound and far-reaching.
Economic Losses
United States: In 2023, the US suffered a record $23 billion in losses due to climate-related disasters.
Argentina and China: Severe droughts in these countries have led to significant economic shrinkage and losses.
Strategies for Resilience
Value Chain De-risking: Brands need to revisit supplier standards and invest in climate-resilient practices.
Operational Adjustments: Adjust sourcing strategies and locations to mitigate risks and maintain flexibility during extreme weather events.
Worker Health and Safety: Prioritize the well-being of factory workers in vulnerable regions by improving working conditions and monitoring.
Long-Term Commitments
Innovation in Materials: Invest in sustainable materials and recycling processes to reduce the industry's environmental footprint.
Collaborative Initiatives: Join and actively participate in industry-wide pacts and coalitions to facilitate large-scale environmental impact.
Reflection
The "Climate Urgency" theme from "The State of Fashion 2024" report is a clarion call for the fashion industry. It's time to shift perspectives and put climate strategies at the forefront of business planning. The fashion industry, with its global reach and influence, has a pivotal role in combating climate change. As we move forward, it's crucial for every player in the industry, from manufacturers to brands, to take collective and immediate action to address this existential threat.
Insight: This blog post is based on the findings from "The State of Fashion 2024" by The Business of Fashion and McKinsey & Company. It reflects the anticipated trends and consumer shifts in the fashion industry