As we enter part 5 of my insights from the McKinsey State of Fashion 2024, we find a stark picture of the fashion industry’s pressing need to address climate change. According to the report, fashion is responsible for 3% to 8% of greenhouse gas emissions. Let’s take a deeper look.

Climate Crisis & The Fashion Industry: Urgent Action Required

The climate crisis has undeniably taken center stage in recent times, and the fashion industry isn’t immune to its far-reaching effects. The fashion value chain, from raw material production to manufacturing and distribution, is under siege from climate-related disasters. Extreme weather events in 2023 have sent shockwaves through the industry, causing supply chain disruptions, factory closures, and economic losses.

By 2030, these events could jeopardize $65 billion in apparel exports and result in the loss of nearly one million jobs in key fashion-producing economies like Bangladesh, Cambodia, Pakistan, and Vietnam. These countries are crucial to the fashion supply chain and represent some of the most vulnerable to climate crisis upheavals.

Fashion’s reliance on raw materials such as cotton adds to its vulnerability to the climate crisis. Cotton production is susceptible to both droughts and flooding, leading to supply shortages and price fluctuations. It’s a vicious cycle that affects everyone along the value chain, from manufacturers to factory workers.

Yet fashion executives still prioritize other challenges like economic uncertainty and geopolitical tensions over climate crisis risks for 2024.  While it’s understandable that fashion executives have a multitude of challenges to contend with, the climate crisis shouldn’t be relegated to the back burner. The catastrophic climate events of 2023 should serve as a wake-up call. Addressing climate-related risks can’t be a distant, long-term project.

There’s an urgent need for a mindset shift across the fashion industry to take a serious position on addressing the climate crisis. Brands and manufacturers should reassess their supplier standards to invest in climate resilience. Fashion leaders would do well to embed climate crisis strategies throughout their businesses. Scenario planning for potential climate impacts, boosting resilience in climate risk “hotspots,” and reevaluating sourcing strategies for flexibility and speed should be priority.

Long-term innovation is key. The fashion industry should invest in sustainable materials, ethical product reuse, recycling, and a shift away from disposable consumption. Industry-wide initiatives, like joining the Fashion Pact and Sustainable Apparel Coalition, are commendable, but they must be followed by concrete action. Ignoring the climate crisis is no longer an option, and sustainable practices must become the new norm to secure the future of fashion.

KEY TAKEAWAYS FOR ADDRESSING THE CLIMATE CRISIS

1. Fashion contributes significantly to greenhouse gas emissions, accounting for 3% to 8% of the total.
2. Extreme weather events driven by climate change could put $65 billion in apparel exports and nearly one million jobs at risk in key fashion-producing economies by 2030.
3. The fashion industry’s reliance on raw materials like cotton makes it vulnerable to supply shortages and price fluctuations due to climate-related disruptions.
4. Despite other pressing challenges, fashion executives must prioritize climate action as climate risks are immediate and impactful.
5. Ensuring the health and safety of factory workers in the face of rising temperatures is crucial.
6. Long-term innovation is essential, including sustainable materials and a shift away from disposable consumption.
7. Industry-wide initiatives like the Fashion Pact and Sustainable Apparel Coalition are important, but concrete actions must follow to effectively address climate risks.