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.
By changing how companies engage with material composition, product consumption and disposal in innovative, inventive and more sustainable ways, they’ll be in a strong position to extract more value from the entire textile and footwear product lifecycle. Circular business approaches have the potential to dramatically shift how revenue growth both rewards and incentives businesses in the fashion and textile value chain by decoupling from resource use and delivering superior risk-adjusted returns with more efficient, more sustainable performance.