In Pakistan, as with many other cotton-growing regions, climate-related disruptions are currently the strongest driver of regenerative agriculture adoption, as farmers face more extreme weather events, water scarcity, declining soil health, and fluctuating yields. However, these challenges are directly linked to declining competitiveness. Reduced productivity and inconsistent cotton quality can impact farmers' profitability and the sector's ability to meet market demand.
Carbon pricing would be the most structurally embedded risk and hardest to reverse. Carbon pricing is different as it sits directly on Scope 3, where 96–99% of apparel emissions occur. That means it’s embedded in Tier 2 manufacturing and upstream energy systems. Unless those systems decarbonise, cost exposure compounds year over year.